Cow confidence with milk price
• Ringarooma dairyman Geoff Cox happy over milk price.
By Tony Scott,
MAY 12, 2021
The early announcement of an opening milk prices by the big processor Fonterra Australia has been welcomed by dairy farmers.
The company surprised suppliers and its competition by announcing on Monday a price of $6.55 a kilogram of milk solids for the imminent season.
It estimated a closing price range of $6.55 to $6.95 a kilogram of milk solids for the 2021-22 season.
The chair of the Tasmanian Farmers’ and Graziers’ Association’s Dairy Council, Geoff Cox, said the move was a confidence builder for farmers.
“It’s not unlike what we’ve been receiving and it’s the third year now of reasonable returns.”
The Ringarooma-based farmer does not supply most of his milk to Fonterra, but said as the processor of about half Tasmania’s yield the Fonterra bid would underpin prices generally.
The strong price and early announcement was due to good market conditions and strong business performance, according to managing director Rene Dedoncker.
“Some of our domestic and export contracts are due to be settled later this month, so we will review this price when these are finalised to ensure we remain competitive, in line with market and business performance throughout the season.
“Our new pricing allows farmers to farm the way that suits their needs with a choice of base rates to suit their milk curve, and also gets cash on farm as early as possible with changes to our incentive structure,” he said.
Mr Cox said Fonterra didn’t have to set its opening price until later in the month.
“Coming out early will certainly give people confidence on top of the other good conditions effecting the industry.
“The other main processors, Lactalis and Saputo, will have to come up with something similar or risk losing suppliers,” he said.