KROWERA dairy farmer Andy Thomas spoke of the annual game of ducks and drakes that takes place between processors in setting milk prices for the new season, with Bulla and Australian Consolidated Milk (ACM) having already upped their opening offers.
Andy supplies Australian Dairy Farmers Corporation (ADFC), which has opened with a price of $9 per kilo of milk solids.
Bulla quotes a price range, having stepped that up from an initial $8.40-$9.20 to $8.70 to $9.50/kg MS.
ACM has increased its original price by 15 cents a kilo of milk solids, up to $9.
Andy described the $9 price as “a starting point”, saying you worry about the finishing price rather than the initial one and noting that prices in NSW and Queensland are already up around the $10 mark.
While acknowledging milk processors are dealing with other companies and have to make a profit, he remarked that dairy farmers continue to face rising costs for all their inputs, including hay and fertiliser, and need to receive a fair price.
Although recent rain has been a positive, much more is needed and it’s now getting too cold to grow much grass, although Andy’s share farmer has succeeded with some oats and radishes, the previous warmer conditions and just enough rain keeping them ticking along.
Andy commented that he recently looked at milk prices around the world, with Australia still one of the cheapest.
“So, that gives you an indication that there’s still a bit of room for improvement in the milk price Australians are getting paid,” he said.
Andy also noted the extent of the impact on milk supply of flooding in Queensland and NSW, and the downsizing of herds locally due to the dry conditions, is yet to become clear, with tight supply likely to justify increased prices being paid to dairy farmers.
Loch dairy farmer Andrew Holman recently spoke of the milk price situation, observing that what is enough for one farmer may not be for another due to individual circumstances.
Variables include stocks of feed and water storage levels as well as whether a farmer is established and debt free or starting out and having to repay loans.
While Andy agrees that is the case, he said nobody subsidised the now established farmers when they were getting a foothold and that it ultimately comes down to the need for processors to pay fair prices.
United Dairy Farmers of Victoria president Bernie Free wrote in the Weekly Times, welcoming a lift in opening milk prices for this season compared to last but arguing the market justifies a price of about $10 per kilo of milk solids.
Noting the current opening prices are only about 50 cents a kilo higher than this year’s closing maximum, he stressed “That’s not enough to match the uplift in global conditions, and certainly not enough to offset the challenges producers are facing on the ground.”
Bernie pointed to a 20 percent lift in the Global Dairy Trade index year-on-year and an overall fall in milk supply across Australia.
“Gippsland, already starting to feel the impact of dry conditions, won’t be immune,” he remarked, adding that South Australia and Western Victoria have been hit hard, with many farmers having to cull herds due to feed and water pressures.
