Saputo and Fonterra Set New Season Milk Prices Amid Market Challenges
Source: The DairyNews
Saputo Dairy Australia has set its opening weighted average milk price for the 2024-25 season at $8 to $8.15 per kilogram of milk solids for exclusive suppliers, signaling a noticeable decrease from last year's $9 per kilogram. Similarly, Fonterra has reduced its opening price to $8 per kilogram, down from $9.20, reflecting broader market adjustments and a downturn in dairy commodity prices.
These new pricing strategies come in response to anticipated reductions in milk prices for the upcoming season, influenced by global market volatility and subdued demand. Both dairy giants have reported significant cuts from the previous year's rates, aligning with current market dynamics and forecasts.
To mitigate the impact of these price adjustments, Saputo is offering its suppliers a suite of support options, including a Dairy Investment Rebate and Milk Cooling Rebate to aid in on-farm infrastructure investments. Additionally, Saputo provides a flat monthly payment option for those preferring consistent financial planning and a growth payment of $0.70 per kilogram of milk solids for any net increase in farm production, along with various financing solutions.
Kate Ryan, Director of Milk Supply and Planning at Saputo Dairy Australia, emphasized that the company's pricing strategy accounts for the ongoing global market fluctuations and domestic market variability, with potential price reviews expected as market conditions stabilize.
On the other hand, Fonterra’s Oceania managing director, Rene Dedoncker, highlighted the downward trend in global markets for cheese—a significant factor in pricing. Dedoncker also noted the influence of cost of living pressures on domestic demand and the impact of increased imports of lower-cost dairy products. Despite these challenges and the exploration of divestment options for Fonterra in Australia, he reassured suppliers that the business operations would continue as usual, unaffected by these strategic considerations.
To mitigate the impact of these price adjustments, Saputo is offering its suppliers a suite of support options, including a Dairy Investment Rebate and Milk Cooling Rebate to aid in on-farm infrastructure investments. Additionally, Saputo provides a flat monthly payment option for those preferring consistent financial planning and a growth payment of $0.70 per kilogram of milk solids for any net increase in farm production, along with various financing solutions.
Kate Ryan, Director of Milk Supply and Planning at Saputo Dairy Australia, emphasized that the company's pricing strategy accounts for the ongoing global market fluctuations and domestic market variability, with potential price reviews expected as market conditions stabilize.
On the other hand, Fonterra’s Oceania managing director, Rene Dedoncker, highlighted the downward trend in global markets for cheese—a significant factor in pricing. Dedoncker also noted the influence of cost of living pressures on domestic demand and the impact of increased imports of lower-cost dairy products. Despite these challenges and the exploration of divestment options for Fonterra in Australia, he reassured suppliers that the business operations would continue as usual, unaffected by these strategic considerations.
