FONTERRA Australia today announced it has completed its final price review for the 2011/12 season and has confirmed all its current Victorian, South Australian and Tasmanian suppliers will receive a price increase (or ‘step-up’) of 8 cents per kilogram of fat and 20 cents per kilogram of protein for all milk supplied in the 2011/12 season.
This brings Fonterra’s average final full-year price across all five of its supply regions to $5.45 per kilogram of milk solids (kg/MS). The price increase will be backdated to July 1, 2011.
“This is our third highest full-year price on record, so it’s a strong finish and we are pleased to maintain our track record of offering suppliers very competitive farmgate milk prices in all of our supply regions,” said Heather Stacy, General Manager of Milk Supply.
“Despite the ongoing softening in dairy commodity prices and the continued strength of the Australian dollar, we have delivered well on our sales and shipping program in the last few months of the season. We have also maintained a strong and balanced product mix, which has enabled us to focus on gearing our production to high-demand, high-value categories.
“Looking ahead at the current season, we are starting to see some more encouraging signs from the market. With data out of the US indicating that dairy producers may be entering a phase of contracting production as a result of the severe drought. This reaffirms our view that the global supply/demand balance should recover into the 2013 calendar year,” Ms Stacy said.
Fonterra’s next farmgate milk price review for the 2012/13 season will take place in September.