Fonterra is the latest processor to announce a milk price step up

It’s increased the average farm gate milk price by seven cents a kilogram, milk solids, bringing it up to $6.05, matching Canadian dairy giant Saputo Dairy Australia-Warrnambool Cheese and Butter.

The increase will apply from July 1, last year, and be paid on February 15, this year.

Fonterra Australia managing director René Dedoncker said the increase would help support farmers, who continued to face challenging conditions.

“There have been some positive signs in global conditions, with recent improvements in GlobalDairyTrade prices and the clearing of skim milk powder stockpiles in Europe, however Australian production continues to decline due to drought and high input costs,” Mr Dedoncker said.

“This is leading to increased competition across our dairy regions, particularly in northern Victoria.

“Rising costs for feed and water continue to be a challenge for our farmers, and we hope this price increase helps to ease some of the pressure for the remainder of the season.”

He said Fonterra would continue to monitor currency and global dairy prices, keeping its farmers updated, throughout the season.

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Bega Cheese and Saputo Dairy Australia Warrnambool Cheese and Butter recently announced milk price increases.

Saputo-WCB announced it was also stepping up its farm gate milk price by seven cents/kilogram for butterfat and 14 c/kg for protein, lifting the amount it would pay farmers to $6.05c kilogram/MS.

The payment will be made with January 2019 proceeds, during February 2019

That’s up from $5.95c kg/MS.

“This payment is retrospective and applies to all qualifying milk supplied by current WCB and SDA suppliers from 1 July 1, 2018,” a Saputo Dairy Australia spokesman said.

Bega’s executive chairman Barry Irvin said the increase would equate to farmers recieving an additional $0.096c/kg for butterfat and $0.192c/kg for protein, as a loyalty payment from July 1, last year.

It would be applied as an increase for milk supplied from February 1, to June 30, this year.

“The current industry circumstances are very challenging, across the supply chain,” Mr Irvin said.

“The prolonged drought in almost all of NSW and south-east Queensland has impacted all in the industry. “

Significant cost increases in Significatn cost increases in fodder and water (particularly northern Victoria) combined with dramatic increased costs in electricity have added a great deal of business pressure.”

Bulla has also announced a 10c/kg MS increase.