The Federal Government’s milk price index would fall short of providing transparency in the processing sector, according to the UDV.
Launched on July 6, the index is aimed at helping dairy farmers better understand and interpret commodity market price signals, to ultimately make more informed business decisions.
‘‘The milk price index is intended to be one tool amongst a range of data sources that will help farmers better forecast and plan for the future,’’ UDV president Adam Jenkins said.
‘‘The index will help farmers focus on the trends of the world market and how that aligns with the farmgate milk price.
‘‘The index allows farmers to track commodity prices received by Australian dairy processors.’’
However, Mr Jenkins criticised the index by saying it didn’t go far enough.
‘‘With the index, we’ll have information about the world market and farm gate prices, but we’re still lacking transparency into manufacturing costs and their impact at the farm gate.
‘‘UDV advocates for transparency throughout the entire supply chain and we are disappointed the milk price index does not achieve this,’’ he said.
‘‘As an outcome of the Federal Government’s review of the index, we would like to see analysis of manufacturing costs to give farmers a clear idea of how the world price translates into farmgate milk prices.’’
The ADF welcomed the announcement, including the introduction of a regional, retrospective farmgate milk price index.
“The purpose of the retrospective index is to help build a marker of actual prices received in each dairy region,” ADF president Terry Richardson said.