SAPUTO Dairy Australia (SDA) has just announced to suppliers its opening weighted average milk price of $8.80 to $8.95 per kilogram of milk solids (kgMS) for the 2025-26 season.
It follows announcements of $8.60kgMS by Fonterra and a range of $8.60 and $9.10kgMS by Burra Foods.
Milk processor Fonterra was first out of the gate with its new milk price for the coming season, prompting a response from dairy farmer representatives that it was too low in the on-going crisis.
Dairy Farmers Victoria President Mark Billing said the price falls short of what is needed to sustain farmers through one of the most challenging periods in recent memory.
Mr Billing said the opening price does not reflect the reality on the ground for Victorian dairy farmers grappling with prolonged dry conditions, skyrocketing input costs, and shrinking margins.
“We recognise Fonterra’s attempt to provide price certainty early, but $8.60 simply does not meet the needs of farmers facing feed shortages, high energy prices, and financial pressure,” Mr Billing said.
“Many farmers are being forced to de-stock or exit the industry altogether. This price will not turn that around.”
DFV is calling on all processors, including Fonterra, to revisit their pricing models and deliver an opening milk price that genuinely supports the viability of Australian dairy farms.
“We need opening prices that reflect the true cost of production in 2025 — not just signals to the market. The days of pricing to the average are over. Our farmers deserve better.”
DFV continues to advocate for a sustainable, profitable future for Victorian dairy and urges the Federal and State Governments to monitor processor behaviour closely and consider additional supports for farmers during this period.
Speaking to suppliers about the opening offer, David Breckenridge, Managing Director, Fonterra Oceania, raised hope of further improvement.
“However, there are favourable signals for the season ahead that are building optimism for the 26 financial year, including the increase in global dairy prices over the last 12 months.”
He said global demand had shown signs of growth, with constrained global supply driving an uptick in global prices throughout the year.
“Australian dairy exports have strengthened on the previous year in value and volume. These improvements have been supported by a return to balance between local and global dairy prices and a favourable, yet volatile Australian dollar.
“Our domestic market, where we direct the majority of your milk, remains challenging. Inflationary pressures have yet to fully ease, and segments of Australian consumers continue to chase value through lower-cost dairy products.
“While there’s room for local demand to lift, we remain confident in the strength of our business and ability to be competitive on price as we navigate these conditions throughout the season,” he said.
Saputo’s announcement
SDA’s milk prices for exclusive supply are available to suppliers in Gippsland, South-West Victoria and South Australia, Northern region and Tasmania.
This year, SDA continues to support farmers with flexible payment options and tailored programs to help achieve their business goals. Farmers can choose a flat monthly payment structure for greater consistency in cash flow, as well as access to supplier investment rebates, the AG Warehouse Loyalty Program, and a growth payment on any net increase in a farm’s milk solids.
In addition, SDA has expanded access to supplier partnership programs to help drive farm business performance, profitability and on-farm sustainability opportunities.
Kate Ryan, Director of Milk Supply and Planning, said SDA’s opening milk price reflected the stabilisation of global commodity prices, offset by sustained domestic market challenges as consumers remain cost sensitive due to cost-of-living pressures.
“While we are optimistic there are long-term opportunities ahead, we are mindful of prevailing headwinds. As the 2025/26 milk year is only just beginning, we will review our farmgate milk prices during the season and pass on step-ups where it is supported by greater certainty across key markets and product categories,” she said.
The milk prices quoted above are a weighted average across SDA’s supply base. Milk prices achieved at individual farm level will vary based on specific milk supply circumstances and a variety of factors on farm. A schedule of monthly minimum milk prices will be available in SDA’s milk supply agreements published online at: www.saputodairyaustralia.com.au/milk-supply.
