Australian dairy prices: David Littleproud, Raff Ciccone urge processors to reflect market
Federal Agriculture Minister David Littleproud is urging processors to pay a fair price to farmers, as Bega leads Fonterra and Saputo in the average farmgate-figure stakes.
THE eyes of the Australian dairy sector are on Fonterra and Saputo management this week after Bega became the first of the big three processors to step up at the farmgate.
After an eight-month-long impasse, Bega chief Barry Irvin broke with the farmgate status quo with a 10 cent lift for suppliers across southeastern Australia.
The move represents a lift from $6.40/kg milk solds to $6.50/kg milk solids in southern Victoria and $6.55/kg milk solds to $6.65/kg milk solids in northern Victoria.
Bega Valley region suppliers will now receive $7.60/kg milk solids.
Saputo and Fonterra remain at $6.40/kg milk solids, a figure confirmed before the start of the 2020-21 season in June 2020.
Federal Agriculture Minister David Littleproud encouraged processors to pay a fair price to farmers.
“This is the responsibility of the ACCC. I would expect them to investigate this and any other anomaly in the dairy market,” Mr Littleproud said.
“While I encourage processors to pay a fair price to farmers, it is not the role of Government to regulate or directly intervene in the market.”
Victorian Labor senator Raff Ciccone said the farmgate impasse was another example of the bargaining inequality that exists in agriculture.
“The ACCC last year through the Perishable Agricultural Goods Inquiry highlighted the power imbalance between farmers and big business,” Senator Ciccone said.
“Dairy farmers deserve a more even playing field in dealing with processors, wholesalers and supermarkets.
“It’s been a tremendous season this year and I would hope that processors would welcome the opportunity to share their financial success with hardworking dairy farmers.”
A spokeswoman for Fonterra Australia said: “Our next bi-monthly price review is in March. “However, when we undertook our last bi-monthly review in January, we notified our farmers we were holding our price due to the high Australian dollar more than offsetting any gains in commodity prices.
“Although recognising the possibility of market and currency movements and the potential for competitive moves during the season, our forecast closing range is $6.40 to $6.50/kg milk solids.”
Saputo management have been contacted for comment.
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