Promising opening milk prices

• Dairy Council chairman and Ringarooma dairy farmer Jeff Cox.

By Daisy Baker
July 03, 2019

Local dairy farmers have welcomed opening milk prices from processors which are significantly up across the board from last year’s opening prices.
At the end of May Fontera Australia announced their opening milk price as $6.80 per kilogram milk solids, which was matched by Saputo Dairy Australia last month.
A number of North-East farmers have also signed over to supply Parmalat, whose average price is $7.05 per kilogram milk solids.
Dairy Council chairman and Ringarooma dairy farmer Jeff Cox said while prices are almost a dollar up across the board, it is a needed increase for the industry.
“We haven’t seen prices like that since the 14/15 season,” he said.
“We are all really optimistic about the season. While the opening price increase might sound like a lot, we’re still experiencing elevated grain prices and energy costs are growing too, so dairy farmers really need this to keep going.”
Confidence is growing in Saputo among North-Eastern suppliers, with several more local farmers signing over to the company, joining the five who started when Saputo entered the region last year.
Mr Cox said competition is healthy for the local dairy industry.
“It’s great to have competition between processors for our milk,” he said.
“It’s great that farmers in this area now have a choice about who they supply to and have the opportunity to go to another company who may suit them better.”
Winnaleah farmer Mark Kerr started supplying Saputo last year and hasn’t looked back.
“I’m really happy with the opening price, which is up quite considerably on last season which opened at $6.05 per kilogram milk solids.
“It’s been tough with electricity costs going up, and high grain prices with drought on the mainland.
“The shortage of grain has pushed the price up so this increase in opening price will help us catch up on that until it comes back down.”
He said he is optimistic about the season after a positive meeting with Saputo CEO Lino Saputo Junior in Launceston last week.
“He met with their North-East suppliers and he assured us that there wouldn’t be any price cuts and there might even be a step up throughout the season,” Mr Kerr said.
“That was one of the reasons I changed. I met him before we changed and liked that the company has good family values and makes that personal contact.
“My father and his father for 90 years only had one option so this is definitely better for the area having a choice in processors.”
Ringarooma farmer Martin Nailer is one of several farmers who have signed over to Saputo in recent weeks.
Mr Nailer said they will start supplying Saputo when they start calving in early August.
“Our main motivation [in swapping] is we weren’t happy with the price and felt that Fonterra weren’t appreciating farmers like ourselves,” he said.
“It seemed like the last few years they were only paying what they had to to maintain milk supply.
“I have heard of at least four other farmer who have signed over to Saputo recently and I think they were in the same boat.”
Ringarooma dairy farmer Stan Cox started supplying Parmalat earlier this year, when the processor was in need of milk suppliers out of season.
“Our motivation in changing over was their price and their milk pattern suits us best.
“Parmalat pay more for the shoulder months and because most of our milking is done in the off-season it was better for us to change over.”
Springfield farmer Wayne Bowen said while they have considered changing to another processor, for the moment they are satisfied with Fonterra.
“We did look into swapping over and we’re still looking - it just comes down to price and the service,” he said.
“The opening milk price is really good and the next season looks like it will be real good with plenty of rain and hopefully grain prices coming down.
“Everyone will check out where they’re better off and make a decision that’s right for them.”