Australian Dairy Farmers Corporation offers farmgate step-up

Breaking through the $10 per kilo milk solids barrier was a dream for farmers a year ago. Now, the Australian Dairy Farmers Corporation has smashed records.

Australian Dairy Farmers Corporation (ADFC) has broken the $10 per kilo milk solids barrier today, with a late February step-up.

In a letter to suppliers, ADFC management confirmed the 15-cent lift, positioning the average at $10.05 per kilo milk solids for the 2022-23 financial year.

The step-up average is comprised of a six-month split: $9.65 per kilo milk solids from July to December 2022 and $10.45 per kilo milk solids from January to June 2023.

ADFC general manager Andrew Sutton said 165 farmers will share in the step-up, which will be paid in the latest monthly milk statement.

Today’s move by ADFC highlights the continued competition for milk supply across south-eastern Australia, despite falls in commodity prices abroad.

A late summer step-up by ADFC is the latest in a series of farmgate gains. PICTURE: ZOE PHILLIPS

In early July, the big three processors offered unprecedented step-ups in the first fortnight of the 2022-23 season.

At the time, Fonterra, Saputo and Bega were all offering at or near a $9.40/kg milk solids average — about $2/kg higher forecasted figures in February and March 2022.

In November, ADFC turned up the competitive heat with the first of the late spring/early summer step-ups.

Earlier this month, Fonterra offered a summer step-up of 15 cents, bringing its average farmgate price to $9.55 per kilo milk solids.

Fonterra Australia managing director Rene Dedoncker said robust domestic sales had given the processor a boost.

“Capturing the strong commodity prices for our cheese contracts in the first half has enabled us to deliver this step-up,” Mr Dedoncker said.

“Despite lower than forecast milk collections and inflationary pressures, demand for our domestic brands and products remains strong and our Australian business continues to perform well.”