LOCAL dairy farmers are bracing for next month’s milk price announcement by Dairy Australia for the next 12 months.
Processors have a June 1 deadline, set by by the federal government’s mandatory dairy code of conduct, to release their prices.
Prices over the last 12 months averaged $9.20 per kilo milk solids in the region with the figure being consistent over the last three years.
Saputo has kicked off the bidding season with a potential weighted average opening farmgate milk price of between $7.80-$8.00 per kilo milk solids.
Bega is still to announce its prices, with other major processor - New Zealand-based dairy giant Fonterra - not expected to publish prices given its shock announcement earlier this month that it is putting its Australian operations up for sale.
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Whorouly dairy farmer Jon Pethybridge, who runs 300 dairy cows on the family's 1000 acre farm, believes the upcoming price announcement on June 3 will be competitive, making a choice of milk processor.
“Right now milk processors are remaining quiet despite Saputo making an early announcement and the recent announcement of New Zealand company Fonterra that they are selling," he said.
“Processors are scrambling to crunch numbers and keep the trend on a financially viable road.
"Fonterra being up for sale will be a 12 to 18 month process.
"It supplies 90 per cent of New Zealand's milk and is the biggest exporter in the world.
"There will be allot of negotiation with the change, however, there will be no cause for panic for dairy farmers as there is still plenty of competition.
"The sale of Fonterra will not have any form of impact on the milk price announcement.
"Dairy farmers who have been loyal to Fonterra will be taken under the wings by other processors moving forward.
“Previous years has shown that the month of June is usually hectic with processors jostling for milk.
“Honestly I can see more settled prices ahead compared to previous years.
“North East milk production has remained stagnant producing 200-230 million litres of milk per year which is positive as the dairy industry is very stable in our region.
“On June 3, the cards will be on the table for farmers with price announcements giving dairy farmers options moving forward.
“Producers can then sign on with their choice of processor with a 14 day cooling off period.”
A big concern for dairy farmers right now is the lack of rain with no sign of the autumn period giving any form of relief making it tough on farmers financially.
“A lack of rain is really putting a squeeze on farmers pockets as we have to outlay extra costing in feed to the cows,” Mr Pethybridge said.
“We can still get good milk prices but our farm will still feel the pinch with the extra expense of feed until the rain arrives.
“There is no rain in sight for the next two weeks or so which means we have to continue hard feeding to keep the production of milk going.”
Rabobank forecasts more milk this season and next
RABOBANK’S most recent report forecasts Australian milk production to finish the 2023/24 season 2.9 per cent higher at 8.23 billion litres.
An early look at the 2024/25 season – to commence on June 1 – sees the bank forecasting a further one per cent increase in milk production ahead.
The report said Australian dairy exports volumes, however, had remained weak, down six per cent season-to-date, as at the end of February.
Local Australian milk pricing is set to be “somewhat positive” for the new season, Rabobank said, with a well-performing domestic market and healthy competition among dairy companies continuing to be key drivers.
Milk production growth is expected to carry momentum into the new season, with Australian dairy farmers generally on a strong footing as the new season approaches.
“Feed availability is adequate following good winter and summer crops and full water storage will also ensure availability of irrigation water,” the report said.
