New Zealand farmer-owned co-op Fonterra has increased the milk price it expects to pay farmers for the 2023/2024 season.

The recovery of dairy markets are gathering pace as milk prices move on to an upward trajectory, the Irish Creamery Milk Suppliers Association (ICMSA) has said.

This comes as Fonterra – the giant New Zealand dairy co-operative – expects the farmgate milk price to be 1.83c/l higher than previously predicted for the the 2023/2024 season.

ICMSA dairy committee chair Noel Murphy has cited the decision by Fonterra Co-op to increase its forecast farmgate milk price by NZ$0.50 as yet another sign that a recovery in dairy markets is now well under way.

‘Massive pressures’

Murphy said that this reality will have to be factored into co-op board decisions when setting September milk prices in the coming days, given the massive pressures that are on primary producers at this time.

“September has been a positive period for dairy markets following many months of decline and the statement from Fonterra highlights a number of positives from a market perspective.

“We’d particularly note the stronger demand from China, which hopefully will be sustained going forward, and indications that milk supply in key exporting regions will be constrained in 2024, which is positive from an Irish farmer perspective.

“The Fonterra announcement means that New Zealand farmers will receive an additional 2/cl for their milk and Irish milk processors need to start looking upwards rather than downwards,” he said.

Farmer suppliers, he added, will absolutely need to see the change in market sentiment and that decisive upward trend reflected in the price they receive for September supplies.