Milk Exchange hosts first online auction

Major milk buyers are among the first users of a Melbourne-based company’s systems, biding for a share in tens of millions of litres of new-season milk.

Milk Exchange general manager Richard Lange. Picture: Supplied

Two major bids were tallied for the Melbourne-based Milk Exchange group’s inaugural online auction last week.

The Melbourne-based trading platform’s first auction had 89.8 million litres of new season milk on offer from 34 farmers from Victoria as well as the Hunter Valley and Southern Highlands regions in NSW.

There were two bids received of $6.65 per kg for 2.7 million litres from Gippsland and $6.55 cents per kg for 5.3 million litres from Victoria’s south west.

But with asking prices of $7.20 and $7, none were accepted leaving a gap of 35 to 60 cents

between buyers and sellers.

Almost all the major milk buyers participated with hundreds of visits to the exchange’s website before and during the auction to assess the farm milk on offer.

Milk Exchange commercial general manager Richard Lange said it was a great step forward in understanding how the technology added transparency and market choice for farmers.

“Interestingly bids were made on seasonal milk rather than flatter supply,” he said.

“Many famers expect buyers to be only interested in flat milk, but this is not the case.

Mr Lange said with the start of the 2021-22 financial year only eight weeks away, there was strong interest in seasonal high-quality milk.

“We had modest expectations on this first auction but were delighted in how it was embraced by buyers and sellers,” he said.

“Trading on the day faced a few barriers including being an early offer of milk for the new season as well as dealing with a new system of selling.

“We were pleased with how the platform performed along with the positive feedback and

suggestions from users who saw opportunities with the new technology.”

Mr Lange said with the auction, farmers had taken a step forward to proactively marketing their milk instead of being reactive to offers from dairy companies.

“This is a case of farmers taking control and offering their milk pro-actively,” he said.

“There’s more to come online and it proves that this is going to be something that we can look forward to as a way of marketing milk in the future.”

An auction for dairy products is also being planned in the near future to build on the success of the farm milk event.

Mr Lange said with the success of the day, Milk Exchange would bring forward the planned next milk auction to May 5.