Australian farmgate milk prices: Lactalis, KyValley and Bega lift

KyValley and Lactalis are the latest processors to offer penultimate week step-ups, on the back of Bega and Saputo.

After a slow start to June, Australia’s dairy factories are now locked in a bidding war with three processors providing fresh step-ups.

Lactalis has provided a 25 cent uplift across most dairy regions while Burra and KyValley have lifted their game in the competitive Victorian marketplace.

The all-Victorian and Tasmanian price for Lactalis has risen from $9.48 per kilogram milk solids to $9.73/kgMS.

Last month, Lactalis created controversy in the fresh-milk focused northern NSW-Queensland market by providing an initial opening figure at 82.3 cents per litre.

The initial NSW offer in May was even lower at 76.7c litre.

But this latest offer has Lactalis at 89.9 cents a litre in Queensland and northern NSW — the equivalent of $12.31/kgMS.

Lactalis has also raised its South Australian opening bid to $10.05/kg MS and in Western Australia their latest offer is $9.40/kg MS.

Meanwhile, KyValley management confirmed a step-up in its western Victorian price from $9.20 to now sit at $9.40kg/MS.

Likewise, Burra Foods lifted its range from $8.70 to $9.20kgMS to a revised $8.90 to $9.40/kg this week.

Saputo and Bega have both lifted this week across all southeast Australian dairy regions, with industry watchers saying Fonterra will be likely to make the next move.

THURSDAY JUNE 22 1PM

Saputo are now ahead of arch-rivals Bega and Fonterra in the dairy price bidding war with a 25c/kg lift this afternoon, eight days out from season deadline.

Suppliers in western Victoria and South Australia will now receive $9.30/kg of milk solids while in Gippsland, the opening offer is $9.15/kg of MS.

Likewise, in northern Victoria, an opening offer of $9.30/kg of MS has been updated today while in Tasmania, the opening figure sits at $9.15/kg of MS.

Management said the revised offer represents a rise 17c/kg of butterfat and 34c/kg of protein.

WEDNESDAY JUNE 21 9AM

Bega is leading the pack on farmgate milk prices, lifting to $9.20 a kilogram, to edge ahead of Saputo and Fonterra on $9/kgMS.

“With our competitive position in mind, we have made the decision to increase our milk prices for our Victorian, Riverina Region and southeast South Australia suppliers for the 2023-2024 financial year,” Bega executive chairman Barry Irvin said.

“As always, we will endeavour to improve milk pricing should market circumstances allow and will continue to review milk pricing to ensure we are making a competitive offer to our suppliers for their milk.”

TUESDAY JUNE 20 12PM

Bulla, Burra Foods and Lactalis have all served up twenty-cent step-ups as the race for milk supply enters the home straight.

With the July 1 season start fast approaching, Bulla announced a step-up of 20 cents per kilogram milk solids across its four price bands.

Bulla suppliers in the top tier, or “Band 0 +P/T”, have seen their opening price lifted from $9.60 to $9.80 per kilogram milk solids.

The “+P/T” stands for “peak to trough” - a new calculation included for Bulla suppliers across all four price bands.

On Monday, Lactalis followed Bulla and Burra’s lead with a 20c step up across Victoria and Tasmania, raising its offering from $9.28 to $9.48 per kilogram milk solids.

Bulla Dairy Foods procurement general manager Rohan Davies noted the processor came out with an opening price before many of its competitors.

“Bulla is pleased to be attracting new suppliers this year and we want our price to be a clear benefit for farmers that are evaluating the current market,” he said.

“Australians continue to show their enjoyment of Bulla products, and the family dairy is proud to be 113 years strong and steadily growing.”

In May, Bulla introduced a new peak to trough (+P/T) ratio on the last two years’ of production.

The PT ratio is calculated as total spring production of milk solids — September to November — divided by February to April production.

Processors are edging closer to $10 per kilo milk solids. Picture: Zoe Phillips

Last week, management at Burra Foods also announced an increase to its opening price at a series of supplier meetings.

The 20c Burra step-up means its opening price range now sits at $8.70-$9.20 per kilogram milk solids.

United Dairyfarmers of Victoria president Mark Billing said the price increases in recent weeks mean the average may well sit around $9.50 per kilo milk solids.

“We’ve still got some time to go before July 1, but things are looking more promising than they were only a month ago,” he said.

“A number of processors are opening with prices above $9.50. Last year, we saw a few put out revised prices in the day or two before July 1, so there’s potential for that to happen again.”

Under the federal government’s mandatory dairy code, processors are required to list an initial dairy price by June 1 but have the flexibility to raise price offers up to July 1.

Last year, a flurry of bids and counter bids were lodged by processors with several revised opening offers announced in the two days before the start of the 2022-23 financial year.