Australian farmgate milk prices have been announced by dairy processors at 6-9 per cent below the current season’s forecast prices, but WA dairy farmers are not feeling the effects like their Eastern States counterparts.
In fact, the national trend may not be reflected in the local market, as Cowaramup dairy farmer Bob Biddulph said the 4¢ a litre increase he was receiving from Brownes Dairy was “welcome” after prices in WA had already been “historically high”.
“We are not complaining,” Mr Biddulph said.
“While there’s been no relief on a cost point of view with fertiliser and feed, milk prices have been at an unprecedented level for a while.”
Mr Biddulph said he was hoping to average 65¢/L over the course of the year but it fluctuated depending on the seasons, especially during winter when when the price was lowest but output was highest.
“The price varies according to the time of year — highest in summer, lowest in winter/spring, and with shoulder periods either side of summer,” he said.
“It will also vary according to individual farmer’s butterfat and protein percentage and milk quality.”
He said the past couple of years have been “buoyant”, especially with meat prices high, although they had “come back a bit” recently.
Brownes Dairy chief operations officer Marc Anderson said it was almost impossible to work out how WA farmgate prices feared against those paid in the eastern states, because while they were published on June 1, they were “already changing upwards due to the severe competition for milk”.
“I suggest WA prices are there at the lower end of the range against Victorian milk prices, but who knows where that will be this week!” Mr Anderson said.
He said all farmers currently in multi-year contracts and signing new contracts with Brownes Dairy will be receiving a 4¢ a litre increase.
WAFarmers Dairy Section president Ian Noakes said while it was compulsory that processors had to announce their intended prices on June one each year, it was a complicated affair and not always easy for farmers to work out.
While he was still getting his head around the updated farmgate prices on offer by various companies, he hadn’t received any calls from WA producers concerned about them.
The Australian Dairy Products Federation reported that farmgate milk prices for 2023/24 were mostly below the current season’s forecast prices, “with adjustments to initial offers still being made”.
Eastern states based dairy processors were priced between $8.65kgMS-$12.22kgMS, depending on the contract, quality and production region.
In the first edition of the Elders Dairy Market Update, the company reported that opening milk prices for the 2023/24 “may not be the outcome producers were looking for”.
It reported that companies were offering opening prices 6-9 per cent lower than the current seasons prices.
“Competition for milk supply remains very high in Australia due to supply reductions, meaning that farm gate milk prices are somewhat detached from the world market,” Elders reported.
“Despite the decline in opening prices for 2023/24, farm gate milk prices remain above long term averages.
“However, producers have been subject to increasing input costs and scarce labour availability, which has tightened profit margins.
“These factors, combined with rapidly appreciating land prices offering opportunity to sell, have led to the expectation that milk supply will fall again in 2023/24 further increasing competition for milk supply.”
