Bulla Dairy Foods is setting the pace on opening farmgate milk prices, announcing a lift this week.
The company was the first out of the blocks on opening prices, announcing in April a 2021-22 season opening price range of $6.40 to $6.90 a kilogram milk solids.
It has now lifted this by 10c/kg MS - with a range from $6.50-$7/kg MS.
Fonterra also moved early, announcing a $6.55/kg MS opening price earlier this month.
The moves come as dairy companies jockey for position ahead of Tuesday's deadline for milk price announcements.
Under the Mandatory Dairy Code of Conduct, all dairy processors are required to announce their new season price by June 1.
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Bulla general manager - dairy and procurement Rohan Davies said the company's strong results this financial year coupled with planning for next year put it in a position to announce the step up.
The announcement was in line with the company's commitment to support it suppliers to plan for their businesses.
"Since our initial FY22 milk price announcement, plans have progressed across many areas of the business with next season on track for a strong outcome," he said.
"As a result, we wanted to act quickly and share this performance with our dairy farming community, as we always have."
Mr Davies said Bulla was committed to a simple, flat pricing model, including no stop charge, volume charge or milk collection fee.
He said the company was looking for new suppliers in south-west Victoria and the Goulburn Valley.
Fonterra third quarter results released
Meanwhile, Fonterra's New Zealand arm has announced higher forecast farmgate milk prices for its suppliers in NZ for next season.
Fonterra announced an opening forecast range for its NZ suppliers for the 2021/22 season of $NZ7.25-$NZ8.75/kg MS, with a midpoint of $NZ8/kg MS.
It also reduced its 2020/21 forecast milk price range by NZ5 cents to $NZ7.55/kg MS.
CEO Miles Hurrell said the improving global economic environment and strong demand for dairy, relative to supply, were sitting behind the co-op's forecast price range for next season.
"Global demand for dairy, especially New Zealand dairy, is continuing to grow," he said.
"China is leading the charge as its economy continues to recover strongly.
"Prompted by COVID-19, people are seeking the health benefits of milk and customers are wanting to secure their supply of New Zealand dairy products and ingredients.
"Growth in global milk supply seems muted and the global supply of whole milk powder is looking constrained.
"Based on these supply and demand dynamics, along with where the NZ dollar is sitting relative to the US dollar, we're expecting whole milk prices to remain at current levels for the near future.
"As we look out over the next 18 months, there are a number of risks, which is why at this early stage we have this large range on our forecast farmgate milk price."
Mr Hurrell said major risks included COVID 19; the impacts of governments winding back their economic stimulus packages; foreign exchange volatility; changes in the supply and demand patterns that could enter dairy markets when prices were high; and potential impacts of any geopolitical issues around the world.
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Carlene Dowie
Carlene Dowie is the editor of the Australian Dairyfarmer magazine and has more than 30 years' experience as a rural journalist.
Carlene Dowie is the editor of the Australian Dairyfarmer magazine and has more than 30 years' experience as a rural journalist.
