Bega, Saputo, Fonterra, Bulla, ADFC: Dairy 2022-23 opening prices last-minute dash

Lactalis has edged towards $10 a kilogram of milk solids as farmers wait to see whether any other processors will raise the stakes.

FRIDAY JUNE 30

Lactalis has lifted its Victorian and Tasmanian offering by 10 cents in a final day bid for supply in the tightly-contested southern market.

The French dairy giant raised its offering late on Thursday from $9.73 to $9.83 per kilo milk solids — at the higher end of bidding in the Garden State.

Frestine also raised its offering to $9.30/kg MS, up from an initial $9.00/kg MS only a fortnight ago, in order to remain competitive with Australia’s big three processors Bega, Fonterra and Saputo.

Milk2Market exchange commercial development manager Richard Lange said after a slow start with opening offers in early June, processors had raised the stakes.

“There were expectations in late May and early June that weak international prices would weigh down opening prices at the farmgate,” he said.

“Obviously, there’s been a lot of change in the past two or three weeks and most of that has to do with the shrinking milk pool.

“There are a number of farmers out there still working out who they sign up with this season. “Clearly that’s why we’ve seen these last week bids.”

WEDNESDAY JUNE 28

Bulla has lifted its opening prices by 10 cents across its four supplier categories on Wednesday afternoon.

Under its pricing system, Band 0 suppliers will now be paid $9.70 per kilogram milk solids, while Band 1 is now $9.50/kgMS, Band 2 now at $9.30/kgMS and Band 3 at $9.10/kgMS.

Pricing also includes Bulla’s new peak to trough (PT) calculation, which has been included by the processor this season in all price bands, providing an additional $0.20/kgMS.

Taking the PT calculation into account, Bulla’s farmgate range now sits at $9.30-$9.90/kgMS.

Price bands and PT ratios are based on the previous two years of supply.

Bulla Dairy Foods general manager Rohan Davies said: “The higher opening price reflects our approach and commitment to offering our valued milk partners competitive pricing.

“We are grateful for the support demonstrated by our existing and new suppliers that have joined for the 2023-24 season.”

TUESDAY JUNE 27

Fonterra has lifted its farmgate offering three days out from dairy season deadline, although smaller players have maintained a competitive edge.

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

On Tuesday, Fonterra lifted to a $9.20 per kilogram milk solids average, roughly on par with Bega but still behind Saputo in several key markets.

The latest Fonterra step up will mean its northern Victorian suppliers will receive $9.19/kgMS, while Gippsland lifts to $9.20/kgMS and southwest Victoria rises to $9.21/kgMS.

Australian Dairy Farmers president Rick Gladigau said the competition for milk was a welcome relief for primary producers concerned about lacklustre early June offerings.

“It’s great for financial confidence in farming,” he said.

“We’ve got to deal with rising electricity bills, labour costs and higher fuel prices. All three inputs are highly likely to rise further in the coming financial year.

“So to start with strong opening prices is important. It gives farmers the ability to plan ahead, to say ‘we can weather the storm if an unexpected cost comes our way’.”

On Monday, Australian Dairy Farmers Corporation confirmed an average farmgate price rise from $9.40/kgMS to now sit at $9.60/kgMS.

ADFC general manager Andrew Sutton said the processor would “continue to monitor pricing movements” and update suppliers accordingly.

The deadline for processor farmgate offerings is July 1. PICTURE: ZOE PHILLIPS

Last week, both Saputo and Bega both delivered extra dairy dollars with concerns in the processing sector over tightening supply.

Saputo suppliers in western Victoria, South Australia and northern Victoria are now being offered $9.30/kg MS, while Saputo’s opener in Gippsland and Tasmania is $9.15/kg MS.

Smaller players were keen last week to get the jump on the bigger processors as the mandatory code deadline loomed.

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

Likewise, Burra Foods lifted its range from $8.70 to $9.20/kgMS to a revised $8.90 to $9.40/kgMS in its most recent offering.

The fresh milk market is particularly competitive north of the Murray after an underwhelming start earlier this month.

Last week, Lactalis provided a 25 cent uplift across most dairy regions with its Victorian and Tasmanian price rising from $9.48/kgMS to $9.73/kgMS.

The French dairy giant created controversy in the fresh-milk focused northern NSW-Queensland market in late May 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.

EastAUSmilk co-chief executive Eric Danzi has been critical of Lactalis and other processors for their lack of clarity on pricing.

“It is very difficult to tell what the average price is likely to be for each processor since all processors have an incentive to make their price look as good as possible,” he said.

“However, it is likely that Bega, Lactalis and Norco are all between 88 and 90c per litre (in the fresh milk market).”