DAIRY farmers’ hopes for a springtime step up in farmgate prices have been lifted by strong international dairy conditions and a New Zealand financial fillup to be passed on to their farmers.
Australian dairy companies’ farmgate price announcements in June this year saw many farmers disgruntled, believing the price announcement did not reach the 50 per cent mark of what they were expecting.
Prices on the June announcement saw: Bega at $7.90-$8.20/kg milk solids (MS); Fonterra $8.00/kg MS; Saputo $8.00-$8.15/kg MS; Lactalis $8.40/kg MS, ADFC $8.20/kg MS; Bulla $7.85-$8.65/kg MS; ACM $7.75/kg MS; Ky Valley Dairy $8.00-$8.30/kg MS; and Frestine at $8.00/kg Ms.
Since then, the global dairy trade index lifted a whopping 5.5 per cent last week, to sit at US$3920 (A$5784) per tonne.
Whole milk powder prices led the way with a 7.2 per cent rise to reach US$3482 (A$5137) per tonne while the butter category rose 3.7 per cent to hit US$6706 (A$9894) per tonne.
Skim milk powder also lifted by a strong four per cent to US$2636 (A$3889) per tonne.
Whorouly dairy farmer John Pethybridge, who runs 255 dairy cows on his 800 acre property, said he was cautiously optimistic about the latest global dairy trade session and the potential to see a price change made for local farmers.
“The latest announcement in New Zealand has certainly pricked the ears up for local dairy farmers in the wake of the June price announcement that proved to be a big letdown,” Mr Pethybridge said.
“The Global Dairy Trade (GDT) governs price structures, based on this, prices have increased that include a bigger profit margin from processors and this needs to be passed onto dairy farmers sooner rather than later.
“Farmers have been struggling for the best part of this year with added farm expenses of feeding due to a poor autumn break and pasture still lacking in some paddocks and a price increase from processors would certainly aid profit margin.
“The pressure sits with Australian processors now to pass on the increase, however, farmers do not have the answer for when this will eventuate.
“Farmers and processors need to work together because we don’t want a shrinking milk pool as a result of farmers getting out of the industry or cutting back numbers due to pressures that include a tight profit margin.”
Dairy Farmers Victoria has estimated the cost of production in the state sits between $7.90 and $8.20/kg milk solids, meaning many farmers are currently either breaking even or barely making a profit.
“As a local farmer, it’s a tough industry to be in and all we are asking the processors is to help us out a bit and work together to make a profit and keep milk flowing,” Mr Pethybridge said.