Fonterra Suppliers group chairman Paul Weller on dairy opening price

Fonterra Australia Suppliers’ Council chairman Paul Weller says the opening price drop is tough, but not unexpected.

An opening price drop by Fonterra was tough but not unexpected, a leading Victorian farmer says.

Fonterra Australia Suppliers’ Council chairman Paul Weller told a function organised by the processor on Tuesday that the price cut from roughly $9.20 per kilo to $8 per kilo milk solids was well telegraphed by the company.

The former National Party MP succeeded Tasmanian farmer Alan Davenport as chairman of the council earlier this year.

“Does the Suppliers’ Council like the $8 (per kilo milk solids opening price)? No. But we do like the fact that Fonterra were honest with us and told us in January that if things don’t improve, this is the price to expect,” Mr Weller said.

“On our farms, we need to be able to make good business decisions about further developing our farms, making our farms more efficient — we’ve got to know what our likely income is going to be next season.”

Fonterra Oceania chief executive Rene Dedoncker said the opening price change reflected increased pressure from imported dairy produce, among other trade and financial factors.

“We look at all the economics. That is the price we know we can earn. So at a minimum price, it’s an appropriate place to start.”