Fonterra lifts farmgate milk prices in boost for farmers.
Until today, Fonterra's Australian suppliers had failed to reap the benefits of a lift in global dairy prices.
Australia's farmers have received a welcome boost, as Fonterra followed Murray Goulburn in raising farm gate milk prices for the 2016-17 season. The dairy giant had announced two price step-ups for its farmers across the Tasman in recent months, but until today its Australian suppliers had failed to reap the benefits of a sudden uplift in global dairy prices.
In a statement to the market around lunchtime, F on terra Australia said its farmgate milk price was now expected to average $5.10 per kilogram of milk solids, a strong improvement from the opening price for the season of $4.75 per kg.
The company added the closing price for the season was now expected to be around $5.20 per kg. "Although the global market remains volatile, since the beginning of the season global milk supply has continued to decline significantly while demand has remained relatively stable," Fonterra Australia managing director Rene Dedoncker.
"We have seen positive movement in GlobalDairyTrade auction prices through August and September, with a 26 per cent increase in the GDT price index since July, although the strong Australian dollar has offset some of the commodity market gains."