Union Dairy Company in early summer step up

Union Dairy Company is now the second processor to step up, with rising farm input costs a contributing factor.

Union Dairy Company is offering an early summer step up of 25 cents per kilo milk solids, the second processor to move in as many weeks.

UDC management confirmed today that the step up takes its average farmgate milk price to $9.90 per kilo milk solids, with a second half average monthly milk price of $10.40 per kilo milk solids.

UDC chief operating officer Andrew Wellington told The Weekly Times that increased feed, fertiliser and energy costs for farmers were a contributing factor to the farmgate lift.

“The step up is also about recognising that the second half of the season will be a tough one given the wet spring we’ve had,” he said.

“Farmers want certainty over pricing, that the farmgate is reflecting market conditions and the growing cost pressures from electricity, from gas, from fertiliser.

“In the past few weeks, there’s been talk of gas prices rising anywhere between 50 per cent and 300 per cent next year, depending on government intervention.

“But there’s also other cost pressures out there and this lift is an acknowledgment of that.”

Union Dairy Company chief executive officer Andrew Wellington. Picture: Karla Morthcote.

Last week, Australian Dairy Farmers Corporation (ADFC) announced it would step up, one of the first players to move since early July.

While late spring was historically a period of price movement from Australia’s big three processors – Bega, Fonterra and Saputo – the 2022-23 financial year kicked off with record prices paid at the farmgate.

As a result, few had offered any change to pricing until last week’s announcement by ADFC management.

Backdated to July 1, an average of $9.90 a kilogram of milk solids will be paid to ADFC suppliers across the 2022-23 financial year.