Bulla steps up milk price as global butter price hits new record

Bulla has lifted its farmgate milk price as global butter prices soar, priming the market for higher prices in 2025-26.

“I’m fundamentally of the view that the settings are there for higher farmgate prices,” Rabobank dairy analyst Michael Harvey said.

Bulla has delivered a 20 cent per kilogram milk solids step up to suppliers, as global butter prices hit a record $US7378 a tonne on the global dairy trade platform on Tuesday night.

Butterfat is critical to Bulla’s production of ice-cream and cream lines, which are sold on both domestic and international markets.

In a letter to suppliers, Bulla chief dairy officer Glen Round stated the new price would be paid retrospectively on milk supplied since July 1 last year, lifting the band zero payment on milk supplied on a peak to trough ratio of less than 1.3 to $8.85/kgMS.

Band 1 pricing on a PT ratio of less than 1.4 is now $8.65/kgMS, band 2 with a PT

Mr Round told suppliers: “We are committed to a sustainable dairy industry, and while we continue to operate in a challenging environment, we are pleased to offer this milk price increase.”

Globally milk prices have been on the rise, with butterfat leading the charge on the back of what Rabobank analyst Michael Harvey said was declining stocks and production.

“The biggest driver is Europe over the past five months,” Mr Harvey said, with demand holding up better than expected.

The NZ GDT shows that after a rollercoaster ride over the past three years butterfat prices have firmed to sit above $US6500 since February last year.

Global Dairy Trade pricing for butter

Mr Harvey said he expected current prices to “hold firm into the new season.

“I’m fundamentally of the view that the settings are there for higher farmgate prices.”

But while butter is buoyant the price of skim milk powder, which is a by-product of butter production, has stagnated at about $US2500 to $US2700 a tonne for the past two years.