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Fonterra Australia announces increases in dairy farm gate prices

Dairy giant Fonterra Australia has announced an increase of 16 cents per kilogram of butterfat and 40 cents per kilogram of protein for the 2013/14 season for Victorian and Tasmanian suppliers.

Fonterra said that they were able to commit to the step up due to strong and consistent international dairy commodity prices, coupled with the fact that the Aussie dollar has steadied at lower levels and that the company has achieved strong forward sales at market highs.

In addition, Fonterra’s two Global Dairy Trade auctions held in August delivered significant revenues and volumes, demonstrating a continued strong demand and confidence in Fonterra products in key export markets.

Managing director for Fonterra Australia, Judith Swales said that strong market conditions and improved confidence was the catalyst for the decision.

“Strong market conditions and our confidence in the outlook for the season helped deliver a step up from our September market review of 8 cents per kg butterfat and 20 cents per kg of protein for the 2013/14 season,” she said.

“We also know that to take advantage of strong demand with increased production, suppliers must have cash on farm as soon as possible. That’s why we have brought forward future, forecasted step ups to deliver a significant, additional step up of 8 cents per kg butterfat and 20 cents per kg of protein. This early step up will help suppliers manage input costs, such as replenishing fodder reserves, and budget for spring harvest costs.”

Fonterra says that the two step-ups will bring the average farm gate price up to $6.00/kg for milk solids, representing what they believe to be a record price for the season.

 

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