May 23, 2016

Fonterra announces support for autumn calving suppliers

Fonterra Australia has announced support measures for its autumn calving suppliers, following its revision of its season 2015/16 farmgate milk price.

These measures aim to balance up the support to suppliers on an autumn calving structure, who are disproportionately affected by the farmgate price reduction.

According to Fonterra Oceania's managing director Judith Swales, Fonterra had spoken with many farmers and heard their concerns regarding the impact on autumn calving.

"Although the reduction in the farmgate milk price affects all farmers, we recognise that it has a greater impact on suppliers with autumn calving herds given the reduction has had to happen late in the season and we need a programme that is fair (to) all our farmers," Swales said.

"We have worked with BSC to better target autumn calving suppliers, by providing an additional autumn offset to farmers for milk supplied in May and June 2016. The package will go some way towards rebalancing the spring versus autumn seasonal incentives for FY17."

The offset will provide autumn calving suppliers an additional $2.50/kgMS in July and August payments based on the kgMS a farmer supplies in May and June 2016. This will effectively be drawn through the redistribution of base rates in the 2016/17 season.

"We know the events of the last few weeks are incredibly tough on dairy farmers. We are listening and we know that changes need to be made. Our priority is to support all our farmers, act fairly, and continue to operate responsibly and transparently so that we have a sustainable Australian dairy industry," Swales added.