Milk processor Burra Foods has announced a 20 cents a kilogram milk solids increase in its farmgate price for the full seasonal period in the 12 months from July 1.
A global imbalance in the supply and demand of dairy products has driven commodity prices higher in recent months, according to Burra Foods chief executive Stewart Carson.
"Decreased milk production in Europe and New Zealand in the second half of 2021, coupled with strong global demand, has increased commodity prices over recent months," he said.
"Burra has continued to be laser focused on maximising value from milk solids and taking advantage of the current global situation.
"Our teams continue to deliver productivity and quality improvements, which has allowed us to be flexible and agile with product mix."
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He said productivity and quality improvements remained a core strength.
"We expect that continued disruptions in supply chains and the conflict in Ukraine will have a material impact on global dairy markets," he said.
"Fuel, fertiliser and grain prices are already trending upwards.
"We expect this will likely place significant pressure on milk production growth internationally, increasing competition for milk and growing food inflation rates."
Mr Carson said the company remained positive about what was ahead in the upcoming season.
"The resilience of our milk supply partners and team members in the last couple of years has been tremendous," he said.
"We have demonstrated that we can continue to navigate through a pandemic and take advantage of a commodity cycle boom whilst supporting the long-term customers with core products that have been the backbone of our business."