Fonterra Australia announces revised Farmgate milk price for season 2016/17


Step up announced increasing average farmgate milk price to $5.10 per kilogram of milk solids (kgMS) for 2016/17 season.

Increased forecast closing price of $5.20 per kilogram of milk solids for 2016/17 season.

Fonterra Australia has today advised suppliers that it has increased its average farmgate milk price to $5.10 per kilogram of milk solids, and increased its forecast closing price for the season to $5.20 per kilogram of milk solids.

Fonterra Australia Managing Director René Dedoncker said that this revised price reflected the strengthening global dairy prices.

“Although the global market remains volatile, since the beginning of the season, global milk supply has continued to decline significantly while demand has remained relatively stable.

“We have seen positive movement in GlobalDairyTrade auction prices through August and September, with a 26 percent increase in the GDT price index since July, although the strong Australian dollar has offset some of the commodity market gains.”

Fonterra has made strong progress on the turnaround of its Australian business, achieving a number of key milestones:

  • The outer shell of the new cheese facility at Stanhope has been built, and new equipment is moving in;
  • We’ve commenced our joint venture with Beingmate at Darnum, and we’ve begun producing nutritionals for Bellamy’s Organics;
  • We’ve expanded our cheese capacity at Wynyard and butter coolroom capacity at Cobden; and
  • We’ve finalised the Wagga Wagga business sale as part of our commitment to divest non-core assets and focus on our strengths.

“Winning in cheese and nutritionals is core to our strategy to become Fonterra’s global ingredients hub for cheese, whey, and nutritionals, complementing our consumer and foodservice businesses,” says Mr Dedoncker.

“This is helping us move our farmers’ milk up the value chain into products generating higher returns, which ultimately flows back to the farmgate.”

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.