Victorian dairy prices compared: Smaller processors lift higher

With July 1 now passed, which processors have lifted the most in the past six weeks? Here’s an easy-to-read table with some surprising results.

Smaller processors such as Union Dairy Company, Bulla and Goulburn Valley Creamery have proven to be the greatest price lifters as the new dairy season swings into gear.

Out of all processors operating in Victoria, UDC has lifted the strongest since the June 2 mandatory dairy code deadline, revising its price from $8.70 per kilo of milk solids to a range of $9.30 to $9.80 – a lift of nearly 10 per cent if taken from its midpoint of $9.55 per kilo milk solids.

Bulla’s consecutive step ups over June have given its suppliers an approximate 8 per cent gain, starting with a range of $8.40 to $9.20 per kilo milk solids to now hover between $9.15 and $9.95 per kilo milk solids.

Goulburn Valley Creamery has also provided a lift of nearly 8 per cent over the month of June, ratcheting up its offer from $9 to $9.70 per kilo milk solids after several step ups ahead of the July 1 season start.

Conversely, established players KyValley and Bega were the only two processors to not publicly declare Victorian step ups in June – although the latter increased its Bodalla price paid to Bega suppliers in southern NSW.

Fonterra started with an average weighted price of $8.60 per kilo milk solids on June 2. Picture: Zoe Phillips

Gippsland farmer Benjamin Vagg said supplier-processor relations would have improved had processors announced farmgate offering around the $9.50 per kilo milk solids mark on June deadline day, rather than revise offers up to the July 1 season start date.

“I have a lot of commentary from mates farming in different parts of Victoria saying if they had all come out around $9.50, 80 per cent of farmers would have signed with their existing factory on the dot,” Mr Vagg, a Dairy Farmers Victoria board member, said.

“Instead, they buggered around, and it just allowed 50 to 60 per cent of farmers to hold out.

“There’s now special deals out there beyond $10 (per kilo milk solids), so there’s a public price that’s out there and a private price.”

Australian Dairy Farmers president Ben Bennett from Camperdown echoed that view, saying the public farmgate figures were not the full picture.

“There’s the publicly promoted prices and then there’s the fresh milk deals, so some of the larger processors have lower average prices than the some of the smaller processors,” he said.

“Farmers are fed up with the games. The processors say they want better relations with farmers but they keep up with these tactics.”