Fonterra steps up Australian dairy 2024-25 farmgate price

Fonterra has become the first major processor to announce a farmgate step up this season. This is what you need to know.

Fonterra has become Australia’s first milk processor to step up this season, confirming a 15 cent per kilo milk solids lift.

Following several sessions of robust results on the Global Dairy Trade index, Fonterra Oceania farm source director Matt Watt said this week’s step-up takes Fonterra’s weighted average milk price to $8.15 per kilo milk solids.

“Today we advised our Australian farmers that we are increasing our 2024/25 minimum milk price by 15 cents per kilo milk solids,” he said.

“This step-up takes our weighted average milk price to $8.15 per kilo milk solids.

“It’s been positive to see Global Dairy Trade prices increase since August, particularly after a flat period for cheese, butter and skim.

“As we earn price in the market, it’s always been our commitment to farmers that we will pass it on, and we’ve been able to do that following some improvement in cheese values which we have translated into contract prices.’

After a spring of inactivity at the farmgate, Fonterra’s move is the first to break ranks and will likely prompt other Australian processors to follow.

Rocketing international dairy prices have prompted both Fonterra and Synlait to lift at the New Zealand farmgate in recent weeks — now offering $NZ9.50 ($A8.53) per kilo milk solids on the other side of the Tasman.

A range of dairy farmer leaders including EastAusMilk president Joe Bradley, Australian Dairy Farmers president Ben Bennett and United Dairyfarmers of Victoria president Bernie Free have all called for step ups in recent weeks as a result of the robust GDT showing.

Management at Fonterra said the Australian farmgate lift followed a review process, held every second month.

“We continue our bimonthly review process, and the next one will be in February,” Mr Watt said. “We will continue to keep our farmers informed on market conditions which impact the Australian milk price throughout the season.”