June 6, 2024
Australian dairy farmers face pay cuts as major processors tighten budgets
Dairy farmers in Australia will receive AUD 0.10 (US$0.066) less per litre for their milk this season as major processors implement cost-cutting measures, Australian Broadcasting Corporation reported.
Fonterra Australia has announced a 15% reduction in its farm gate milk price, offering AUD 8 (US$5.32) per kg for milk solids, equivalent to AUD 0.60 (US$0.40) per litre. Fonterra Australia managing director Rene Dedonker described the price cut as a responsible measure.
Dedonker noted that while the domestic market is performing well, global market challenges are significantly impacting their business. This has been evident in the increased imports of cheese and butter on local supermarket shelves.
In the past 18 months, ten Australian dairy factories have announced closures. Dedonker acknowledged the need for budget tightening and was optimistic about the future and confidence that farmers would continue to supply the company.
However, Australian Dairy Farmers President Ben Bennett expressed concerns that many farmers would struggle. "Our costs have gone up considerably," Bennett said, adding that production volumes could be jeopardised, and consumers might ultimately be affected.
Bennett warned that if processors do not offer adequate payments, the milk supply will dwindle as farmers leave the industry.
- Australian Broadcasting Corporation
