Fonterra steps up 13 cents a kilogram

Fonterra steps up Australian farmgate price 13 cents a kilogram

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STEP UP: Fonterra has joined other Australian processors in announcing a step up in its farmgate milk price for this season.

STEP UP: Fonterra has joined other Australian processors in announcing a step up in its farmgate milk price for this season.

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Fonterra has lifted its Australian farmgate milk price by 13 cents a kilogram milk solids.

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Fonterra has lifted its Australian farmgate milk price by 13 cents a kilogram milk solids.

This takes its average farmgate milk price to $6.53/kg MS.

Fonterra is the last major processor to announce a step up but it has announced a slightly bigger increase, with other processors announcing 10c/kg increases.

Saputo Dairy Australia announced a step up at the start of March, taking its weighted average farmgate milk price for the 2020/21 season in its southern milk region to $6.50/kg MS, up from $6.40/kg MS.

Bega Cheese and Burra Foods announced 10c/kg MS increases in February.

Bega's price increases from $6.40 to $6.50/kg milk solids in southern Victoria and from $6.55 to $6.65/kg milk solids in northern Victoria.

Burra's price lifted its prices to a $6.20-$6.60/kg MS range.

Bulla Dairy Foods increased its price by $0.10/kg MS in early December.

Fonterra Australia managing director René Dedoncker said changes to market conditions since its last bi-monthly price review in January had enabled it to lift the milk price.

"While currency remains high it has stabilised and we've seen a sharp lift in commodities, particularly milk powders, which is helping to offset the currency," he said.

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Fonterra also announced its interim results on Wednesday, with the Australian business delivering a good result.

"Our business is in good shape and is a safe home for our farmers' milk," Mr Dedoncker said.

"Our consumer business produced a strong performance as consumers remained at home and our brands are well placed to benefit from the culinary trend.

"Each of our brands are growing ahead of their categories, extending our market leadership positions.

"Our foodservice business, while impacted by COVID due to lockdowns and travel restrictions, has managed to rebound.

"The ingredients channel has been impacted by the challenging trade conditions, including China trade relations, closure of the daigou channel and shipping delays.

"Building a repeatable business gives us confidence in growing our partnership with our farmers and is one where we can all benefit.

"We remain committed to supporting our farmers through the consistency of regular price reviews, and paying a competitive milk price."

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