June 1, 2023

 

Australian dairy farmers face lower price offerings for upcoming season

 

Australian dairy farmers are bracing for a challenging season ahead as the country's major dairy processors revealed lower price offerings, Australian Broadcasting Corporation reported.

 

Leading processor Fonterra Australia has announced a significant 10% reduction in its farmgate milk price, setting the opening offering at AUD 8.65 (~US$5.64; AUD 1 = US$0.65) per kg of milk solids or AUD 0.65 (~US$0.42) per litre.

 

Despite stating that it is higher than the international market, this decision has left many dairy farmers concerned about their future prospects.

 

Other dairy companies have also revealed their price offerings. Bulla took the lead earlier in the week, offering a starting position of AUD 8.80 (~US$5.74) to AUD 9.90 (~US$6.46) per kg of milk solids.

 

Mondelez, the parent company of Cadbury, said that it would offer AUD 8.73 (~US$5.69) per kg or AUD 0.66 (~US$0.43) per litre to farmers who supplied them exclusively, while non-exclusive contracts would receive AUD 7.93 (~US$5.17) or AUD 0.60 (~US$0.39)  per litre. Canadian dairy giant Saputo announced an opening weighted average of AUD 8.90 (~US$5.80) to AUD 9.05 (~US$5.90), which represents an approximate 8% decrease compared to last season's price.

 

Rene Dedoncker, the managing director of Fonterra Australia, expressed pride in the relationships built with farmer suppliers and the company's commitment to continue the partnership.

 

Victorian dairy farmer Greg Peddle, who operates a sizable herd of 800 cows in Yarram, south Gippsland, believes that Fonterra's pursuit of profit is leaving dairy farmers at a disadvantage.

 

Peddle said that Fonterra seems to have forgotten what it means to lead the industry and should be taking a more proactive role to attract supply.

 

Alan Davenport, chairperson of the Fonterra Australia Suppliers Council, echoed the sentiment, describing the news as "disappointing but not surprising."

 

He said there is a significant financial impact on dairy farms, such as a potential AUD 270,000 (~US$176,000) drop in income for an average dairy farm in Tasmania.

 

-      Australian Broadcasting Corporation