New Zealand farmgate milk price hits double digits

Australia’s top dairy farmer says processors need to provide some Christmas farmgate cheer, as Fonterra raise New Zealand farmgate prices to double digits for the first time.

Fonterra has provided New Zealand farmers with a third price lift for the season, hitting double digits at the Kiwi farmgate for the first time.

Auckland management raised the midpoint of the 2024-25 season forecast farmgate milk price by 50 NZ cents to now sit at $NZ10.00 ($A9.12) per kilo milk solids.

The NZ announcement comes only two days after Fonterra lifted its Australian farmgate price, the only major Australian processor so far to provide a step up this financial year.

Fonterra chief executive Miles Hurrell cited Chinese demand recovery and increased interest from southeast Asia as factors behind the price rise.

The positive international sentiment has been reflected in the Global Dairy Trade index, which climbed again this week, the headline figure now sitting at $US4193 ($A6507) per tonne.

“Looking at supply, milk production out of the US and Europe continues to be impacted by local factors, while production out of most regions of NZ has increased,” Mr Hurrell said.

“We’re continuing to monitor factors that may influence global supply and demand dynamics, including any potential impact from heightened geopolitical uncertainty.”

On Tuesday, Fonterra confirmed its weighted average milk price in Australia would rise to $8.15 per kilo milk solids.

Australian Dairy Farmers president Ben Bennett said every processor needed to lift their game to reflect improved international conditions.

“Over in New Zealand, they’re offering a big sausage roll with a heap of tomato sauce. In Australia, there’s no meat when it comes to the farmgate — just some flakes of pastry in an empty paper bag,” he said.

Australian Dairy Farmers’ Ben Bennett.

“This isn’t aimed at Fonterra - all the factories need to step up.

“We’ve got Christmas coming, processors: Let’s provide some farmgate presents to farmers. “Don’t be the guys that shot Santa.”

Fonterra Oceania farm source director Matt Watt said Australia and New Zealand were different markets and prices were calculated very differently.

“Around 95 per cent of New Zealand’s milk is exported and the product mix is different,” he said. “We saw the differences between Australia and New Zealand play out last season when the Australian farmgate milk price finished at $A9.20 per kilo milk solids when the New Zealand farmgate milk price translated to $A7.23 ($NZ7.83) per kilo milk solids.”