DAIRY giant Fonterra has released its eagerly anticipated milk prices for the 2023-24 season on deadline day for the release of pricing information under the dairy industry's mandatory code of conduct.
The NZ-based processor, one of the two giants of the Aussie dairy sector together with Canadian-owned Saputo, has come up with an initial price of $8.65 per kilogram of milk solids.
This figure comes in under offers from other processors participating in the Victorian market, Australia's largest dairy state, such as South West Dairy, a cooperative based in Victoria's large south-west dairying region, which offered $9/kg milk solids and Bulla, $8.80 to $9.40/kg milk solids.
Fonterra Australia managing director René Dedoncker said the price reflected falling international dairy markets.
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He said world values had come back by 17 per cent in the past year, however, Australian farmgate prices remain above world levels, which has allowed Fonterra to offer the price it has, given it has a strong domestic focus.
"Despite the decline in international prices, the outlook for dairy remains generally positive with global demand currently expected to lift in the medium-term, with only modest supply growth forecast in export regions," he said.
Fonterra will continue to focus on its current market objectives.
"Our Australia business continues to perform well, with our consumer and food service sales channels maintaining their market-leading positions," Mr Dedoncker said.
"The focus remains on putting the milk from our farmer suppliers into the highest value products, managing our costs and maintaining a profitable business."
He said he did not feel the fact Fonterra's initial offer was lower than rivals would hinder the company's ability to accumulate milk.
"We are confident in our price position and our ability to be competitive, with our diversified product mix, sales channels and access to domestic and export markets giving us options for our farmer suppliers' milk."
Meanwhile, Australian Dairy Farmers president Rick Gladigau said today's pricing deadline highlighted the benefits of the mandatory code of conduct.
"The fact that dairy farmers will, by 2pm today, know what price their processor is offering for the coming season is a direct benefit of the work of Australian Dairy Farmers to make milk prices more transparent," he said.
"In the not-too-distant past, dairy farmers could be many weeks into the supply season, having their milk collected by a processor for an undisclosed price.
"Thanks to the mandatory dairy code of conduct, dairy farmers now have a month to consider processor's offers, get milk price income estimations and sign an agreement."
Saputo is yet to post its price with the deadline for release in just over an hour.