FONTERRA Australia has announced an opening farmgate milk price of $4.75 a kilogram of milk solids for its 2016-17 season.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
The announcement comes 24 hours after Murray Goulburn announced its opening price of $4.31kg/MS.
It was a mere 24 hours before the end-of-financial year announcement deadline.
Lobby groups are encouraging farmers to take stock of their business, to rally together and seek the help available to them as they forward plan for the unprecedented cuts of about 10 per cent to last season.
The price cuts mean many farmers will be working without pay for years.
Fonterra issued a statement, detailing its “focus on the future” that includes building on the company’s strengths.
The company’s chief operating officer of velocity and innovation, Judith Swales, said it was a “responsible” opening price, reflecting market conditions.
“Our forecast is based on the Australian dollar holding at around 74 cents to the US dollar and reflects the revenue we expect to earn on products produced using our manufacturing assets,” she said.
“Our farmgate milk price in Australia is also impacted by global dairy markets given our mix of domestic and export sales.
“While we are still seeing an imbalance between global milk supply and demand there are signs in key milk producing areas of a slowdown in production and increased imports into key markets such as China, Asia and Latin America.
“This supports our view of a recovery in global prices as we move through the season.”
The company forecasts its average closing milk price for the season will hit $5kg/MS.
United Dairyfarmers Victoria president Adam Jenkins said on Tuesday many farmers were left feeling numb after price announcements.
These also include Warrnambool Cheese and Butter at $4.80kg/MS, National Dairy Products and Bega Cheese at $5kg/MS and Burra Foods at $4.40 to $4.60kg/MS.