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Fonterra Australia has today advised its farmers of an increase of 10 cents per kilogram of milk solids (kgMS) to its farmgate milk price for the 2017/18 season, bringing its average farmgate milk price to $5.62kgMS when changes to milk composition and the seasonal curve are factored in. The increase will apply from 1 July 2017 and will be paid on 15 December 2017.
Fonterra’s additional payment of 40 cents/kgMS is payable on top of the revised farmgate milk price, and brings the total average cash paid to $6.02kgMS.
Fonterra Australia Managing Director René Dedoncker said Fonterra’s Australian business is growing stronger as its product mix rebalances, enabling it to earn good returns from the market.
“Our plants, including our recently reopened Stanhope cheese plant, are operating efficiently,” said René.
“We’re continuing to grow our Australian business and will soon announce the investments we are making across our manufacturing sites that will allow for an additional 500 million litres of processing capacity, which will enable us to create more value for our suppliers, as well as our wider industry.
“We’re also exploring ways that we can work more closely with our suppliers, including whether there is a co-operative solution for our Australian suppliers.”
Fonterra has also revised its forecast closing milk price range, to $5.62 to $5.70kgMS, and noted that whilst currency has weakened, there had also been some softening in the global market.
“We remain committed to providing our farmers with clear market-based signals, and the 10 cents/kgMS reduction in the top end of our forecast range is a prudent way to reflect the impact of this global volatility on the market farmgate milk price,” said René.
“However, demand for dairy remains strong in key regions, and we are confident with our increased farmgate milk price in the current conditions.