New pricing structure giving farmers choice to farm the way they want.
Fonterra Australia has announced a weighted average farmgate milk price for the 2021/2022 season of $6.55 per kgMS, with an estimated closing price range of $6.55 to $6.95 per kgMS.
Fonterra Australia Managing Director René Dedoncker said that good market conditions and a strong and well-performing business have given Fonterra the confidence to provide farmers with an early opening price.
“Coming out with a price early provides our farmers with a clear line of sight to help them make better decisions and plan for the year ahead.
“Some of our domestic and export contracts are due to be settled later this month, so we will review this price when these are finalised and to ensure we remain competitive, as we will in line with market and business performance throughout the season.
“On the market, we’ve seen recent strength in commodity prices as global supply chain challenges begin to moderate. The Australian dollar has traded between 76 – 78 US cents, but risk remains given the strength of the economy.
“With the easing of COVID-19 restrictions, we are also seeing a robust recovery of the out of home business with more people returning to restaurants and cafés.”
Mr Dedoncker said that Fonterra has also been working with its farmer representative body, the Fonterra Australia Suppliers’ Council, on a new pricing structure for the new season which is all about choice for farmers.
“Our new pricing allows farmers to farm the way that suits their needs with a choice of base rates to suit their milk curve, and also gets cash on farm as early as possible with changes to our incentive structure,” said Mr Dedoncker.
The minimum price is set out in Fonterra’s base and seasonal rates tables and Milk Supply Agreements, which are available to farmers on Fonterra’s dedicated website at www.farmsource.com.au/pricing.