Fonterra increases forecast prices for 2017-18 season

Fonterra suppliers will receive an average of $5.70 per kilogram of milk solids for the opening of the 2017-18 season, after the processing giant revealed its updated season forecast on Wednesday.

Tasmania’s largest dairy processor revealed it would pay farmers an extra 40c per kilogram of milk solids on top of its forecast price as part of a goodwill payment after a tumultuous 12 months.

The forecast season opening price for next season will be at $5.30kgMS but when coupled with the additional payment, farmers will receive on average a $5.70kgMS payment.

Fonterra managing director René Dedoncker said the company had taken a “responsible view” in the current dairy world market when setting its forecast prices.

“This is a responsible price in the current market. World dairy prices have strengthened, reflecting the strong fundamentals supporting global dairy markets,” Mr Dedoncker said.

The additional 40c payment was received positively by Tasmanian Fonterra suppliers when it was announced in May.

Tasmanian Farmers and Graziers dairy council chairman and dairy farmer Andrew Lester said at the time, the price forecast showed goodwill.

“It’s a lot better position than recent years,” Mr Lester said.

Fonterra Australia’s opening price and forecast closing price range also reflects its commitment to provide clear and timely price advice to its farmers.

“Four weeks ago we announced our forecast closing range, six weeks out from the beginning of the season, to give our farmers an early indication of our price so that they could plan ahead. Today we have upgraded that range,” Mr Dedoncker said.

“Our opening price and forecast closing range are a demonstration of our new way of working, with close engagement with the Bonlac Supply Company to ensure we have input from our farmers.”

Individual suppliers’ milk prices will vary across Fonterra’s supply regions, depending on the individual farm’s milk profile, regional production factors, milk quality and farm management systems.