Fonterra Australia has announced an increase of 20¢/kg of milk solids, bringing its average farm gate milk price to $5.50/kg milk solids.
Announced on Friday, the increase will apply from July 1 and will be paid on August 15.
Fonterra’s additional payment of 40¢/kg MS is payable on top of the revised farm gate milk pricing, bringing the total average cash paid to $5.90/kg MS.
Managing director Rene Dedoncker said improved market conditions supported the step-up.
‘‘Since the start of this season our milk pool has grown, and our assets are nearing optimal capacity,’’ he said.
‘‘This price increase will improve cashflow positions on-farm, reinforcing growing confidence of our farmers.’’
Fonterra has also updated its forecast closing milk price range to $5.50-$5.80/kg MS, noting that while commodity prices were strong the rally in the Australian dollar was likely to influence the end-of-season milk price within that forecast range.
Mr Dedoncker said Fonterra would continue to keep farmers updated throughout the season.