Most of Australia’s 12 dairy companies have announced the new season’s opening milk prices at around $8/kg milksolids except for one specialised co-operative opting to pay about 50% more.
Norco has opened with $12.35, similar to last season, for 280 farmer-suppliers on the north coast of New South Wales and in southern Queensland.
Traditionally Norco leads the way in NSW as Tatua Co-operative does in Waikato, New Zealand, but it is also bouncing back from record-level floods in 2022 that shut its Lismore plant for 18 months.
In the floods of February 2022 it also lost two rural stores and a feed mill, and the head office was inundated.
Norco produces fresh milk and ice cream in Byron Bay and Lismore.
The range of forecasts has been from $7.20 to $8.70, with a strong resemblance to Fonterra in NZ, which declared $7.25 to $8.25, not allowing for the small currency difference.
There are also regional differences between the major dairy farming zones in Australia, plus some seasonal variation based on historical weather patterns.
Most Australian companies pay on the basis of their domestic dairy products, including home brands, not the export prices.
There are 4000 farms producing around 8.3 billion litres annually, or about 700 million kg milksolids, for an average milk revenue per farm of $1.4 million.
On the south coast of NSW, Bega chief executive Pete Findlay said export conditions are increasingly variable.
“Two-thirds of our milk pool is impacted directly or indirectly by global commodity prices, so we need to understand where they might go over the next 12 months.”
Listed company Bega has strong cheese brands along with liquid milks, foodservice products and non-dairy foods and annual revenue in excess of $3 billion..
The Chinese-owned Burra Foods company in Victoria’s Gippsland commented on the changing international markets and the need for flexibility.
“Sharing our product mix, markets, strategic focus and ongoing investment programme is important to ensure our milk supply partners feel connected and confident in the future of our business,” chief executive Stewart Carson said.
Canadian company Saputo announced a milk price range of $8 to $8.15 across all five Australian regions where it has collections.
Milk supply and planning director Kate Ryan said the price reflects the softer international milk market.
“Our opening milk price factors in ongoing global market volatility due to subdued demand, as well as greater variability in domestic markets and anticipated market returns,” she said.
Fonterra Oceania managing director Rene Dedoncker said weaker global cheese prices and increasing milk supply in Australia contributed to his opening price average of $8.
A year ago there was a bidding war between processors for supply contracts from farmers but conditions have changed, he said.
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