Revealed: NZ dairy farmers secure massive pay boost as Fonterra exits Aus
Australian dairy farmers demand answers as New Zealand counterparts secure a staggering 30 per cent increase in their Fonterra milk payments.
New Zealand farmers enjoyed a 30 per cent boost to their Fonterra pay cheques last financial year, new figures confirm.
Fonterra management confirmed a final average payout of $NZ10.16 per kilogram milk solids ($A8.98) for NZ suppliers the 2024-25 financial year - 29.75 per cent up on the $NZ7.83 per kilogram milk solids result for the 2023-24 season.
In what is likely to be its final financial year results before Fonterra exits Australia, the Auckland-based dairy giant boasted a $1.1bn after tax profit for 2024-25, with NZ farmer-shareholders also receiving a record payout.
United Dairyfarmers of Victoria president Bernie Free said the NZ price confirmation was fresh evidence that Australia’s farmers were being short-changed at the farmgate.
He said the federal government’s mandatory dairy code of conduct needed reform given processors were not reflecting either domestic or international pricing conditions.
“The processors claim that you can’t compare New Zealand but only when it suits them,” Mr Free said.
“The New Zealand farmgate price being up 30 per cent is an indicator of the strength of the international market. Australia’s price isn’t keeping pace and the processors aren’t even trying to defend it anymore. They’ve been very quiet in recent times.”
The Weekly Times contacted Fonterra’s Australian representatives but commentary was not forthcoming.
Released on Thursday, Fonterra’s full 2024-25 financial year result of $NZ26bn ($A22.9bn) in revenue was up 15 per cent with a total of $NZ16.2bn ($A14.3bn) delivered to NZ farmer shareholders.
Fresh from the recent Australian sale to Lactalis, Fonterra chief executive Miles Hurrell said the result was one of the co-op’s strongest years since being established two decades ago.
“We continue to see good demand from global customers for our high-quality products made from New Zealand farmers’ milk and this is driving returns through both the farmgate milk price and dividends,” he said.
Mr Hurrell reaffirmed the $NZ10 per kilogram milk solids NZ midpoint for the 2025-26 financial year, although the figure is subject to change.
“Global Dairy Trade prices continue to be robust, as does demand from customers for our products sold off GDT,” he said.
“However, the risk of potential volatility in commodity prices and exchange rates from geopolitical dynamics remains.”
Most processors across southeastern Australia opened between $8.80 and $9.30 per kilogram milk solids in June, lifting incrementally ahead of the July 1 season start.
Bendigo Bank agribusiness senior analyst John Droppert said there was potential for a springtime step up in Australia, depending on processor competition.
“My expectation will be that as the season plays out, we will see some improvement with Australian farmgate milk prices,” he said.
