Agriculture
9 June, 2024
Dairies face price drop amid rising costs
LODDON dairy farmers are preparing for a 15 per cent price drop as some operating costs more than double. Fonterra Australia has announced the cut to its farm gate milk price, with an opening offering of $8 a kilogram for milk solids, or 60 cents...
LODDON dairy farmers are preparing for a 15 per cent price drop as some operating costs more than double.
Fonterra Australia has announced the cut to its farm gate milk price, with an opening offering of $8 a kilogram for milk solids, or 60 cents a litre.
Managing director Rene Dedonker said the 15 percent drop was a responsible number.
Calivil dairy farmer Richard Hicks said: “In the last two years our electricity bill alone has increased 200 per cent.
“That’s on top of increases in fuel, wages and other overheads.
“Now it look’s like we have to absorb a 10 or 15 per cent drop in the price being paid for our milk.
“The cut, depending on the company farmers are selling to, will be anywhere between 60 cents and 90 cents.”
Milk factories have cited declining commodity demand in framing their starting point at around $8 per kilogram of milk solids.
Saputo Dairy Australia announced its opening weighted average milk price of $8 to $8.15/kg MS for exclusive supply in the 2024-2025 season compared with last year’s opening offer of $9/kg MS.
Fonterra has dropped its opening price to $8/kg, compared to last year’s opening at $9.20/kg.
United Dairyfarmers’ Victoria president Bernie Free said while dairy farmers’ prices would go down, their costs would rise.
“That will be at least four to five per cent due to inflation,” he said. “Hopefully this is just their first, starting offer.
“This is just the minimum price. We might have some counter offers come through over the next month.”
Under the mandatory dairy code, processors had until 2pm Monday to release their milk supply agreements and a minimum opening price.
Meanwhile, Australian milk production increased 2.5 per cent in April, bringing season to date production three per cent ahead of the comparative according to Dairy Australia.
It was the 12th consecutive month of year-on-year growth in Australian milk production. Victoria was up four per cent for the month