Fonterra Australia steps up farmgate price for 2023

Record opening prices have been topped up with summer step-ups and Fonterra is the latest to join the farmgate frenzy.

Fonterra is offering a summer step-up of 15 cents, bringing its average farmgate price to $9.55 per kilo milk solids.

In a letter to suppliers, Fonterra management confirmed the 15 cent step-up, that accounts for rises of 13 cents per kilogram for butterfat and 18 cents per kilogram for protein.

Fonterra managing director Rene Dedoncker said the latest step-up was effective from July 1 last year, with payments scheduled for next week.

“Capturing the strong commodity prices for our cheese contracts in the first half has enabled us to deliver this step-up,” Mr Dedoncker said.

“Despite lower than forecast milk collections and inflationary pressures, demand for our domestic brands and products remains strong and our Australian business continues to perform well.”

Rene Dedoncker is the managing director of Fonterra Australia. Photo: Aaron Francis

Today’s announcement is the latest in a series of step-ups by Victorian processors, with supply tight across south-eastern Australia.

In December, Union Dairy Company (UDC) stepped up by 25 cents per kilo milk solids, bringing its first half-year price to $9.90 per kilo milk solids, and its second half average price to $10.40 per kilo milk solids.

During the pre-Christmas period, Australian Dairy Farmers Corporation also stepped up to provide an average of $9.90 a kilogram of milk solids across the 2022-23 financial year.

Mr Dedoncker confirmed Fonterra’s half year results will be announced on March 16.