Fonterra Australia has today advised its farmers of an increase of 20 cents per kilogram of milk solids (kgMS) to its farmgate milk price for the 2017/18 season, bringing its average farmgate milk price to $5.50kgMS. The increase will apply from 1 July 2017 and will be paid on 15 August 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 $5.90kgMS.
Fonterra Australia Managing Director René Dedoncker said that improved market conditions and the strength of the Australian business supported this step up.
“Since the start of this season our milk pool has grown, and our assets are nearing optimal capacity,” said René.
“Coupled with strong demand from Fonterra’s Australian and global customers, this has enabled us to deliver this step up to our farmers.
“This price increase will improve cashflow positions on farm, reinforcing growing confidence of our farmers.”
Fonterra has also updated its forecast closing milk price range, to $5.50 to $5.80kgMS, and noted that while commodity prices are strong, the rally in the Australian dollar was likely to influence the end of season milk price within that forecast range.
“We continue to monitor currency movements closely and will keep our farmers updated throughout the season with the latest market conditions.”