FONTERRA Australia announced an opening farmgate milk price for next season of $5.60 per kilogram of milk solids for suppliers with a forecast of $6.00 kg/MS, full-year milk price.
The news comes one week after processor Murray Goulburn announced their record opening price, on par with Fonterra's season opening.
The opening price announcment coincided with a season increase update of 4 cents per kilogram of fat and 10 cents per kg of protein for milk supplied in the 2012/13 season for suppliers in Victoria and Tasmania.
The step-up will be paid with June proceeds on 15 July 2013, which Fonterra Australia Managing Director Judith Swales said the company was aware of the challenging season and the essential need for cash flow to help suppliers plan with confidence for next season.
Ms Swales said the step-up to suppliers was due to Fonterra's commitment to pass through market improvements.
“We value our suppliers loyalty and commitment to producing high-quality milk and promise to work with them to ensure their farm is a robust, sustainable business that delivers solid returns over time,” Ms Swales said.
“Our goal and strategy is to have the most competitive and sustainable dairy supply chain here in Australia.
"We know delivering on this goal starts with the profitability of our Suppliers and that’s why we are pleased to reflect the improved market conditions with a strong opening price for next season.”
Fonterra is offering suppliers interest-free advances for six months following touch seasonal conditions.
Individual supplier’s milk prices will vary across Fonterra’s supply regions, depending on the individual farm’s milk profile, pricing options, regional production factors, milk quality, and farm management systems.