Fonterra Australia reveals 2022-23 season opening price

Fonterra is now in the race for dairy supply for the new financial year, joining other processors north of $8 with its opening price.

Fonterra has opened with an weighted average farmgate milk price of $8.25 per kilo milk solids for the 2022-23 season.

Today’s announcement means Australia’s big three processors will all start above $8 per kilo milk solids by the time the June 1 deadline rolls around, as mandated by the Federal Government’s dairy code of conduct.

Fonterra Australia managing director Rene Dedoncker also announced a step-up of 10 cents per kilo milk solids for this season, taking its 2021-22 average price to $7.40 per kilo milk solids.

International uncertainties on dairy trade were acknowledged by management today, particularly supply chain issues as a result of the recent China lockdowns.

However, Fonterra farm source director Matt Watt told The Weekly Times there was a need to provide an early price to aid farm financial preparation for the coming financial year.

“I think it’s really important for farmers from a cash flow perspective,” he said.

“Because we know input costs are rising, particularly as we come into this critical autumn period.

“There are some uncertainties out there- lockdowns in China, particularly the major cities of Shanghai and Beijing. There’s also the conflict in Ukraine, broader supply chain disruption- all of those things are challenges on the horizon.

“We thought it was important, as we did last year, to give farmers an early line of sight (on prices at the farmgate).”

Rene Dedoncker. Picture: Aaron Francis

Bulla was the first processor out of the 2022-23 starting blocks, confirming in March an opening price of $7.40 to $8.00 per kilo milk solids.

Bega was the second processor to join the fray last month with an opening milk price in the range of $8.20 to $8.60 per kilo milk solids.

New player Goulburn Valley Creamery, part of the Henry Jones group, went out with an $8.50 to $8.80 per kilogram of milk solids opening range earlier this month.

Mr Dedoncker said the early May announcement helped suppliers plan for the season ahead.

“We continue to deliver, despite the challenges of lower milk production and supply chain disruption, and we made a commitment to increase the price paid to farmers where our business can support it,” he said.

“It gives us good momentum as we head into the new season, where we’re opening at an average farmgate milk price of $8.25 per kilo milk solids.

“Like last year, we’ve come out early with an opening price in May to help farmers plan for the year ahead and budget in the face of rising costs, and we will review our price in June once key contracts, including cheese exports, are finalised.”