The contracts, made public by The Weekly Times in March, saw large northern dairy farmers able to lock into a price of $6.71 a kilogram of milk solids, but they must provide a minimum amount of milk each month for the whole year.
On top of that, they were backpaid until July 1 last year for milk already supplied.
News of the contracts angered Fonterra suppliers on standard milk supply arrangements who were to receive a final price of $6.05/kg/MS.
Fonterra Australia’s Farm Source general manager Matt Watt said the North Fresh contract price would be reset for the 2019-20 season to reflect the changed global market.
Mr Watt said the contract price until July next year might be higher, but would remain at a minimum of $6.71/kgMS.
Under the North Fresh contracts, Mr Watt said suppliers contracted to supply a minimum volume of milk at their seasonal lowest monthly level.
But they must produce at least a million litres of milk annually, or 83,333 litres a month.
He said they would be paid at $6.71/kgMS for that milk and any milk produced above the minimum level would be paid at the standard rate, but would be subject to step-ups — currently at $6.05/kgMS for this season’s milk.
Mr Watt said a couple of new suppliers had signed up to the North Fresh contracts.
“But it (North Fresh contracts) was primarily around protecting the milk flow through Stanhope from the existing supply base,” he said.
Mr Watt said western Victoria farmers supplying milk under West Fresh contracts for Woolworths fresh milk were receiving the extra 10c a litre promised by the supermarket. He said that would equate to about $1/kg/MS to those suppliers on top of the average $6.71/kg/MS they received.