On Thursday, April 10, Fonterra advised its Australian suppliers it was increasing the minimum milk price by 20¢/kg of milk solids, comprising 17¢/kg butterfat and 24¢/kg protein.
This takes the weighted average milk price to $8.35/kg MS.
Fonterra Oceania’s farm source and sustainability director Matt Watt said it was Fonterra’s commitment to farmers to pass on market improvements.
“In recent months, global market conditions have held and continued to show signs of improvement,” Mr Watt said.
“While current uncertainties in the global economic and trade environment remain, and there is potential for disruption, the softer Australian dollar has enabled improved returns on some of our export exposed product, supporting this step-up.”
VFF UDV president Bernie Free said the additional support provided by Fonterra would be welcomed by farmers facing rising input costs, dry conditions and ongoing market volatility.
“It’s important to recognise that even with this step-up, farm gate prices are still lagging behind what we’re seeing internationally,” Mr Free said.
“While the global dairy market has shown some signs of recovery, Australian producers continue to face unique pressures, including escalating energy and feed costs, labour shortages and weather extremes.”
Mr Free said the announcement also reinforces the critical importance of the Mandatory Dairy Code of Conduct, which establishes clear rules around milk supply agreements and ensures farmers are treated fairly in negotiations.
“The dairy code plays a key role in restoring balance to the dairy supply chain,” he said.
“It helps safeguard producers from unfair contract terms and gives them more confidence when making investment and production decisions.”
