AUSTRALIA - Fonterra Australia has revised its farmgate milk price, meaning that the full 2015/16 season price will be reduced from A$5.60 per kgMS to A$5.00 per kgMS.
The news comes after another large dairy co-operative in Australia, Murray Goulburn, announced a reduced milk price at the end of April.
Fonterra also announced the Fonterra Australia Support Loan, which offers a loan of up to 60c per kgMS that is repayable from FY18 onwards for those who choose to take up the loan.
Managing Director Fonterra Oceania Judith Swales said the price change reflected the reality of the supply and demand imbalance that is affecting global dairy commodity prices, compounded by the recent strength of the Australian dollar.
“The reduction in the farmgate milk price is the last thing farmers want to hear – however, it is unlikely to come as a surprise.
“With around 40 per cent of Australia’s milk exported, our ongoing message has been that Australia is not immune to the global dairy challenges, that the milk price did not reflect current reality and that farmers need to budget conservatively.
“Fonterra is committed to taking a leadership position to drive towards more transparency on milk price so that farmers have a clear line of sight to budget, plan and respond,” said Ms Swales.
Following the Murray Gouldburn announcement, Australian Dairy Farmers' President, Simone Jolliffe said that the situation is particularly troubling during a time when farmers are already experiencing hardship.
“Many farmers are already experiencing a challenging season due to dry conditions - market volatility adds to the already difficult task of managing and budgeting through such a period. This announcement will significantly damage confidence and potential investments in the dairy industry,” Mrs Jolliffe said.
“I know it’s a very frustrating situation facing farming families at this time. During times like these we need to ensure we are looking out for one another, and seeking support where possible.”
ADF said it is working with state dairy farming bodies and Dairy Australia, to support farmers and ensure they have access to all the resources they need.
“ADF will continue to talk to processors to understand the full impact of this announcement on the industry as a whole. We will also continue to urge them to communicate with their suppliers and explain any changes,” Mrs Jolliffe said.
TheCattleSite News Desk