Fonterra is the second Australian milk producer to announce a step up in its farmgate milk price this week, days after Lactalis announced it would boost its milk price for the upcoming season.
In a letter to suppliers on Friday, Fonterra announced it would increase its weighted average farmgate milk price to $8.80 a kilogram of milk solids, comprising 47 cents a kilogram of butterfat and 65c/kg of protein.
The latest forecast is guaranteed for the 2022/20 season.
Fonterra's step up of $0.55/kg MS on its May 11 opening price follows similar moves from other major market competitors.
"We will continue to monitor price developments to ensure we remain competitive," Lactalis southern region supplier services manager Matt Morrow said.
Earlier, Bulla Dairy Foods announced a milk price between $8.70/kg MS and $8.90/kg MS, while Saputo announced its opening price of $8.50/kg MS.
Fonterra stated that its price step up was driven by high milk prices in a competitive milk supply environment, as well as ongoing market uncertainty which stemmed from COVID-related shipping delays and increased input costs.