Fonterra Australia has announced its farmgate milk price for the 2017/18 season and an additional payment for its Australian suppliers.
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The forecast farmgate price range Fonterra’s Australian suppliers will receive between $5.30 and $5.70 per kilogram of milk solids.
Suppliers will also receive an additional payment of 40 cents per kilogram of milk solids, bringing the forecast price range to between $5.70 and $6.10.
Fonterra Australia managing director Rene Dedoncker said the business was in a stronger position this year, and the forecast was made today – six weeks before the season started – so farmers could plan for next season.
“We’ve invested in world-class assets, improved our product mix, and exited non-strategic businesses. This coupled with the rebalancing of global supply gives us the ability to pay a competitive milk price to our farmers,” Mr Dedoncker said.
“A competitive price supports our investments, helping us to utilise the re-built capacity at Stanhope, capture global demand, and ultimately deliver higher returns to our Australian farmers and our owners,” he said.
The additional 40 cents per kilogram of milk solids payment will be paid to all current, retired and recommencing suppliers and Fonterra will also reimburse the interest charge for the Fonterra Australia Support Loans package that was included in this season’s milk price.
“We said that we would consider Murray Goulburn’s recent announcements including the decision to forgive its Milk Supply Support Package. We’ve consulted with the Bonlac Supply Company on the best way to respond to our suppliers,” Mr Dedoncker said.
As farmers we need timely and clear price information so that we can plan ahead.
- Tony Marwood
Bonlac Supply Company chairman Tony Marwood said the price forecast and additional payment showed Fonterra was listening to farmers and committed to reinstating confidence in the dairy industry.
“As farmers we need timely and clear price information so that we can plan ahead. Fonterra is first to provide a closing forecast price range for next season, and this goes a long way for farmers in helping us budget with certainty,” Mr Marwood said.
“The last 12 months have been difficult for all farmers, and today’s announcement is a significant step forwards to helping restore confidence in our industry,” he said.
Primary Industries minister Jeremy Rockliff said Fonterra Australia’s farmgate price forecast was a step forward towards rebuilding the confidence of farmers.
“We also acknowledge Fonterra’s decision to make an additional payment on top of its farmgate milk price, relieving the financial pressure of the retrospective support loan package, and improving cash flows for many dairy farmers,” Mr Rockliff said.
“For many reasons, including price and extreme weather events, it has been an extremely difficult 18 months for our dairy industry and [this] decision by Fonterra is a welcome step in the right direction,” he said.