Fonterra Australia has announced a step up of four cents per kg of fat and 10 cents per kg of protein for milk supplied in Victoria and Tasmania in the 2012/13 season.
It simultaneously announced a strong opening farmgate milk price for next season of $5.60 per kg of milk solids (kg/MS) for suppliers in Victoria and Tasmania and a forecast full-year milk price of $6.00 kg/MS.
Judith Swales, managing director at Fonterra Australia, said the company is pleased to be passing through market improvements.
"We value our supplier's loyalty and commitment to producing high-quality milk and promise to work with them to ensure their farm is a robust, sustainable business that delivers solid returns over time," she said.
"Our goal and strategy is to have the most competitive and sustainable dairy supply chain here in Australia. We know delivering on this goal starts with the profitability of our suppliers and that's why we are pleased to reflect the improved market conditions with a strong opening price for next season."
Fonterra also extended its offer for suppliers to access interest-free advances for a period of six months until 30 September 2013.
Earlier this week Murray Goulburn (MG) also announced an opening price of $5.60 per kilogram of milk solids.