Milk Prices Disappoint Suppliers in Australia
Source: dairynews.today
Opening milk prices for the 2025-26 season have left Australian milk suppliers disillusioned, sparking concern over the industry's future amid dry conditions and costs surpassing production prices.
The start of the 2025-26 dairy season in Australia has ushered in widespread disappointment among suppliers as opening milk prices fall below the cost of production, triggering fears for the industry's future. Given the persistent dry conditions and scant fodder reserves, many farmers are questioning their ability to continue amidst financial challenges.
For instance, Girgarre dairy farmer Pat Nicholson expressed disappointment with the initial price of $8.85/kg for milk solids, which was subsequently raised to $9 by Australian Consolidated Milk (ACM). He stressed the need for prices to reach at least $9.50 to remain viable. "Considering current seasonal conditions, we need to be over $9 as a minimum and realistically more like $9.50," said Mr. Nicholson. Similar sentiments were echoed by Stu Modra of Gunbower, highlighting the high costs of hay ($400 to $700 per tonne) and other inputs.
The stress on farmers is compounded by processors offering enticing contracts, though Nicholson remains cautious, saying: "An additional 20 cents is not worth the risk … processors are just dangling carrots to secure their own supply, rather than looking at the long-term sustainability of farmers." The sentiments were shared by Alpine Valleys Dairy president Ebony Mull, condemning Fonterra's low benchmark price of $8.60/kg MS, set amidst high processor profits. Meanwhile, Victoria's Dairy Farmers president Mark Billings labeled the season as atypical, urging processors to act on their declared appreciation of suppliers. "A strong milk price is not a luxury, it’s a necessity," he declared.
For instance, Girgarre dairy farmer Pat Nicholson expressed disappointment with the initial price of $8.85/kg for milk solids, which was subsequently raised to $9 by Australian Consolidated Milk (ACM). He stressed the need for prices to reach at least $9.50 to remain viable. "Considering current seasonal conditions, we need to be over $9 as a minimum and realistically more like $9.50," said Mr. Nicholson. Similar sentiments were echoed by Stu Modra of Gunbower, highlighting the high costs of hay ($400 to $700 per tonne) and other inputs.
The stress on farmers is compounded by processors offering enticing contracts, though Nicholson remains cautious, saying: "An additional 20 cents is not worth the risk … processors are just dangling carrots to secure their own supply, rather than looking at the long-term sustainability of farmers." The sentiments were shared by Alpine Valleys Dairy president Ebony Mull, condemning Fonterra's low benchmark price of $8.60/kg MS, set amidst high processor profits. Meanwhile, Victoria's Dairy Farmers president Mark Billings labeled the season as atypical, urging processors to act on their declared appreciation of suppliers. "A strong milk price is not a luxury, it’s a necessity," he declared.
