Fonterra Australia announces increased farmgate milk price for season 2016/17


Step up announced increasing average farmgate milk price to $5.20 per kilogram of milk solids (kgMS) for 2016/17 season.

Fonterra Australia has today advised suppliers that it has increased its average farmgate milk price to $5.20 per kilogram of milk solids. This brings Fonterra’s farmgate milk price to its forecast closing price for the 2016/17 season.

Fonterra Australia Managing Director René Dedoncker said that this revised price reflected improvement in the global commodity markets and progress on key initiatives for the Australian business.

“Production has fallen across the major exporting regions, particularly Europe and New Zealand, and we’ve seen a significant decline in Australian milk supply.

“This has helped to rebalance global supply, while demand has remained firm. As a result, there has been a steady improvement in global dairy commodity prices and this is reflected in our farmgate price.

“Our strategy continues to progress, helping us to rebalance our product mix into products generating those higher returns, which we’re able to deliver back to farmers at the farmgate,” says Mr Dedoncker.

“Over the past six months we’ve achieved a number of key initiatives, including:

  • Strong growth for our Ingredients business, with almost 1,000 containers of cheese, whey and nutritionals exported to key global customers across December and January.
  • The construction of our multi-million dollar Stanhope cheese plant and expansion of our Cobden coolroom are also progressing well, with Stanhope on track for completion in mid-2017, and the Cobden coolroom ready to accommodate growth in Western Star from April, and
  • The Beingmate joint venture at Darnum is up and running, with the first product made under the JV now rolling off the line destined for China.

“The progress we’ve made on our strategy, coupled with improvements in the global dairy market, has enabled us to deliver this step up to our farmers.”

Individual suppliers’ milk prices will vary across Fonterra’s supply regions, depending on the individual farm’s milk profile, regional production factors, milk quality and farm management systems.