Farmer Power questions why Fonterra, Saputo and Bega have not moved at the farmgate

Farmer Power says Fonterra, Saputo and Bega have consistently failed to outline why the 2020-21 season farmgate figure has remained around the $6.40kg/milk solids mark.

Fonterra Australia's milk processing plant at Dennington in 2019, before the processor left the Warrnambool region facility. Picture: Peter Hemphill

AUSTRALIA’S big three processors need to explain why they’re keeping farmgate prices in a holding pattern, a farmer advocacy group says.

Farmer Power chief executive Garry Kerr said Fonterra, Saputo and Bega had consistently failed to outline why the 2020-21 season farmgate figure remained around the $6.40kg/milk solids mark while international prices boomed.

“The mandatory dairy code of conduct does not stop the processors from stepping up,” Mr Kerr said. “Farmers are sick of these multinational companies playing games.

“When you’ve got international prices booming, sales at home in Australia are doing well; why hasn’t there been any change at the farmgate?”

Both Fonterra and Saputo opened on July 1 at $6.40/kg milk solids while Bega split the difference between southern Victoria at $6.40/kg milk solids and northern Victoria at $6.55 /kg milk solids.

The headline Global Dairy Trade figure has grown nearly 18 per cent since mid-November, with six consecutive rises up to the latest result in early February.

Last week, Australian Dairy Products Federation president Grant Crothers pushed back on calls by the United Dairyfarmers of Victoria to raise farmgate prices.

“Increases in the GDT Price Index are welcome but due to being in US dollars do not necessarily translate into FMP (farmgate milk price), which is in Australian dollars,” Mr Crothers said.

The head of the processor representative body is the only figure to speak publicly on the matter in months with Fonterra, Saputo and Bega consistently declining to comment.

“It’s about time Fonterra and the other processors explained why there’s been no change at the farmgate. Farmers are the backbone of their industry and they deserve respect,” Mr Kerr said.

South Australian Dairyfarmers Association president John Hunt said international market conditions were tracking the right way for the Australian farmgate.

“The way things are overseas, it seems like everything’s coming into play,” Mr Hunt said.

“There may well be a step up next month, or into April, because that’s the way the market is heading. It’s hard to say when exactly, but thing’s are looking positive.”

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