Fonterra price increase

Fonterra Australia has announced a stepup of 10 cents per kilogram milk solids.

The price increase has taken Fonterra’s average 2021/22 price to $7.40/kgMS, and an opening weighted average farmgate milk price of $8.25/ kgMS for the 2022/23 season.

Fonterra Australia managing director René Dedoncker said the latest price increase demonstrated another year of consistent performance for Fonterra’s business.

“We continue to deliver, despite the challenges of lower milk production and supply chain disruption, and we made a commitment to increase the price paid to farmers where our business can support it.

“It gives us good momentum as we head into the new season, where we’re opening at an average farmgate milk price of $8.25/kgMS.

“Like last year, we’ve come out early with an opening price in May to help farmers plan for the year ahead and budget in the face of rising costs, and we will review our price in June once key contracts, including cheese exports, are finalised.”

Mr Dedoncker said while Fonterra’s business was well-placed to continue to deliver good returns, recent falls in commodity prices and currency volatility had been factored in when setting next season’s price.

“China’s COVID-19 lockdown, the Russia-Ukraine conflict and continued global supply chain disruption combined with inflation have had short-term impacts on dairy demand. This has flowed through to commodities on Global Dairy Trade with prices down 13.4 per cent over the last four auctions.

Mr Dedoncker said while the outlook for dairy remained positive and they expected global demand to recover next season, inflationary pressures, rising interest rates, increased volatility, and COVID-19 and geopolitical disruptions would continue to be watch-outs.