Online trading platform Milk Exchange delivered what was believed to be a first for the Australian dairy industry last week when it held an auction for farm milk.
The auction attracted strong interest from buyers and sellers, however, no milk was sold.
There was 89.8 million litres of new season milk on offer from 34 farmers from Victoria's dairy regions, the NSW Hunter Valley and Southern Highlands.
There were two bids received of $6.65 per kg for 2.7 million litres from Gippsland and $6.55 cents per kg for 5.3 million litres from Victoria's south west.
But with asking prices of $7.20 and $7, none were accepted leaving a gap of 35 to 60 cents between buyers and sellers.
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Almost all the major milk buyers participated with hundreds of visits to the exchange's website before and during the auction to assess the farm milk on offer.
Milk Exchange general manager, commercial development Richard Lange said it was a great step forward in understanding how the technology added transparency and market choice for farmers.
"Interestingly bids were made on seasonal milk rather than flatter supply," he said.
"Many famers expect buyers to be only interested in flat milk, but this is not the case.
"There remains strong interest in seasonal high-quality milk.
"We had modest expectations on this first auction but were delighted in how it was embraced by buyers and sellers."
Trading on the day faced a few barriers including being an early offer of milk for the new season as well as dealing with a new system of selling.
"We were pleased with how the platform performed along with the positive feedback and suggestions from users who saw opportunities with the new technology," Mr Lange said.
"There was a lot of learning on the day for buyers and sellers, as well as the team at Milk Exchange.
"We are looking forward to the next auction."
Mr Lange said with the auction, farmers had taken a step forward to proactively marketing their milk instead of being reactive to offers from dairy companies.
"This is a case of farmers taking control and offering their milk pro-actively," he said.
"There's more to come online and it proves that this is going to be something that we can look forward to as a way of marketing milk in the future."
An auction for dairy products is also being planned in the near future to build on the success of the farm milk event.
Mr Lange said with the success of the day, Milk Exchange would bring forward the planned next milk auction to May 5.
"Any farmers who are interested in registering their milk should make contact with the team."
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