Dairy farmgate: Joe Bradley says processors have no price cut excuse

eastAUSmilk president Joe Bradley says processors have no excuse to cut farmgate prices, with a new Kiwi price jump the latest example.

eastAUSmilk president Joe Bradley. Photo: Josh Woning

Processors have failed to explain the need for a farmgate price cut, dairy leaders claim, with a surprise New Zealand lift cited as the latest example.

In Auckland today, Fonterra announced an opening farmgate milk price range for the NZ 2024-2025 season of $NZ7.25-$NZ8.75 with a midpoint of $NZ8.00 per kilogram milk solids.

The NZ lift equates to equates to an effective Australian price range of $A6.69-$A8.07 with a midpoint of $A7.38.

Fonterra NZ chief Miles Hurrell noted Global Dairy Trade prices had lifted in recent months, “back to levels seen around the start of the calendar year.”

“Looking to the 2024/25 season, milk supply and demand dynamics remain finely balanced and China import volumes have not yet recovered to historic levels,” he said.

“Given the early point in the season, the uncertainty in the outlook and ongoing risk of volatility in global markets, we are starting the season with a cautious approach.”

The NZ price confirmation comes as Australian farmers await the June 3 deadline for processors to declare their hands, following months of pricing uncertainty.

eastAUSmilk president Joe Bradley said the NZ move was further evidence that processors could keep Australian farmgate prices at current levels.

“The processors have been running around for months saying the price has to come down. Well, here’s more news that undermines that argument,” Mr Bradley said.

“The NZ price this time last year was lower than it is now and Australian processors came out with a strong price, the price here ended up being at least in the nines (higher than $9.00 a kilogram milk solids).

“The processors keep saying it should be lower, they point to the international market, but there explanations are pretty threadbare. There’s no genuine excuse for a price cut and farmers will be bloody furious if we see a price reversal next week.”

The Auckland announcement comes only a fortnight after Fonterra announced it would seek to exit the Australian industry, although the processor added it was committed to operating this side of the Tasman for the next 12 to 18 months.

NSW Farmers dairy committee president Phil Ryan said the NZ announcement reflected a positive trend witnessed in consecutive GDT sessions.

“The Global Dairy Trade has been moving in a positive direction for some time now, this is just the latest indication that international conditions are improving,” he said.

“For stability in dairy, to retain farmers in the sector and attract future farmers, we need a strong price at the farmgate next season.”

Australia’s processors have declined to reveal ahead of time their pricing for next season with only Saputo providing a forecast figure of between $7.80-$8.00 per kilo milk solids.

Saputo management said the forecast was liable to change, with competitors maintaining a silence so far in May.