Australian dairy farmers enjoy record-breaking farmgate prices

One of Australian dairy’s rising star processors has broken through the $10/kg milk solids barrier, right on code deadline.

Southern Australia’s $10 a kilogram of milk solids ceiling has been smashed with top suppliers at a rising processor set to receive the milestone milk figure.

Bulla confirmed this week it had lifted its farmgate price window just prior to the July 1 deadline to $9.40-$10.00, a substantial lift on its March indicative range.

The processor was the first out of the 2022-23 starting gate in March with an opening range of $7.40 to $8.00 - kicking off a series of offers and counter-offers.

Bulla procurement general manager Rohan Davies said the new price, confirmed last week and released publicly on Monday, reaffirmed the processor’s market leading status.

“Bulla last week provided an increase for milk suppliers farmgate price, maintaining the family dairy’s position as one of the leading processors with record opening

prices for the start of the (new) season,” he said.

Bulla was not the only processor to engage in a volley of last-minute offers, with several smaller processors edging towards $10/kg before the July 1 season start date.

Burra Foods chief executive Stewart Carson last week confirmed the processor’s opening farmgate price range had been lifted to $9.10-$9.50/kg milk solids

“The competition for farmgate milk supply continues to accelerate. It is definitely a sellers’ market and we have been monitoring announcements on a daily basis,” Mr Carson said.

“Milk supply partnerships are the foundation of our business, and we need to maintain a competitive price.”

Goulburn Valley Creamery further increased its average milk price to $9.75/kg milk solids.

Management said the figure applied for 2022-23 for exclusive and non-exclusive supply.

Union Dairy Company (UDC) also increased its average milk price to $9.65/kg milk solids — the second lift in a week.

Last weekend, UDC raised its average price to $9.50/kg but then lifted days later to the $9.65/kg figure.

“Being a smaller company we are nimble and are able to react quickly to the changes in the market,” UDC milk supply general manager Monique Jeffries said.

“We have a new pricing model with three pricing options. It is simple and has been welcomed by our suppliers. It is attractive for a wider range of farmers and lets them farm to the farm and optimise margins rather than chase a milk price that may reduce their profitability.”

United Dairyfarmers of Victoria vice president Mark Billing said the record-breaking opening prices were welcome news for primary producers facing the forces of inflation.

He said the $9/kg plus prices had given the sector a renewed sense of confidence as the new financial year unfolded.

“It has a flow-on effect, that’s for sure,” he said.

“Service providers in places like Colac, Cobden, Camperdown and dairy towns across the state do get a lift when dairy prices are this strong.”