Dairy processing giant Fonterra says it will pay more to Australian suppliers after it revised prices upwards amid growing demand.
Its average milk price for 2017/18 now sits at AU$5.50 per kilo of milk solids, up from $5.30. However, Fonterra Australia will pay $0.40 more per kilo of milk solids, sticking to its commitment made in May of this year.
Back then, Fonterra Australia Managing Director René Dedoncker said the company had taken a responsible view in setting its opening price and forecast closing range, which reflects Fonterra’s Australian improved product mix and the current commodities market.
Dedoncker said: “This is a responsible price in the current market. World dairy prices have strengthened, reflecting the strong fundamentals supporting global dairy markets.
“We’ve made significant investments in Australia and achieved a number of milestones for our business, including our multi-million dollar cheese plant at Stanhope, expanded capacity at our Cobden and Wynyard plants, and commencing our joint venture with Beingmate at Darnum.
“This has helped to rebalance our product mix, underpinning the price we can pay to our farmers.”
Individual suppliers’ milk prices will vary across Fonterra’s supply regions, depending on the individual farm’s milk profile, regional production factors, milk quality and farm management systems.