Cream ahead on dairy front

VICTORIAN dairy farmers are set to receive price increases of up to a 20 per cent at the start of the new season on July 1 due to strengthening world prices and demand.Dairy processors Murray Goulburn, Warrnambool Cheese and Butter Factory and Tatura Milk Industries have this week reportedly said they expected prices to be much higher than 2006/07.A 20pc rise on last year’s opening price would mean a record price of $8.40 a kilogram of butterfat at the start of the season with step-up payments likely to follow. If this eventuates it would be 20c/kg higher than the 2000/01 season.“It’s still a couple of weeks before we announce an opening price but we are certainly looking at a major increase compared to last year and a record milk price,” Murray Goulburn chairman and Gippsland farmer Ian MacAulay said.Murray Goulburn’s milk price peaked at $8.20/kg in the 2000/01 season.United Dairyfarmers of Victoria president Doug Chant said he was expecting about a 20pc increase on the opening price.“It’s looking quite good but equally the dollar is going the wrong way. It would be good for it to come back,” he said.Because of the drought, Mr Chant said it would take a number of years to get depleted herd numbers back to where they were but the quickest way to get there was through better farm gate prices.Dairy Australia general manager trade and strategy Chris Philips said the outlook for stronger farm gate prices was being driven by a doubling of prices from last year for skim and whole milk powder. “They are both touching $US4000 a tonne whereas a year ago they were tracking in the low twos. “But even for cheese and butter those prices have moved up between 30-40pc.”He said the price increases were being driven by strong demand from China, the oil exporting countries in the Middle East, Mexico and tight supplies.