This takes Fonterra’s average farm gate milk price to $7.30/kg MS, which will be backdated from July 1.

Fonterra Australia managing director René Dedoncker said this price rise came on the back of continued strong dairy prices coupled with the good performance of Fonterra Australia’s business.

“We know that the dry summer in many regions and higher input costs on-farm are impacting profitability, so we hope that passing on this increase now will help offset some of these costs,” Mr Dedoncker said.

“Although we are seeing historically high commodity prices and a weaker Australian dollar, the decline in milk production in Victoria and Tasmania is limiting the upside from export markets.

“We also continue to see the impacts of the global supply chain disruption on our business with no immediate end in sight, and more recently the domestic supply chain has been severely impacted by COVID.”

Bulla Dairy Foods has also lifted its farm gate price.

Bulla Dairy Foods general manager of dairy and procurement Rohan Davies said following strong cream and ice-cream production and sales during Bulla Dairy Foods’ peak Christmas period, the company was lifting its price by 10¢/kg MS, retrospective to July 1.

“Despite significant disruptions to our supply chain in January due to COVID-related issues, Bulla was able to deliver its biggest cream production period ever over Christmas,” Mr Davies said.

The increase lifts one grade of milk to $7.45/kg MS and another grade to $7.35/kg MS, which make up the majority of Bulla’s milk supply.