Fonterra Australia has announced an increase of 13 cents per kilogram of milk solids (kgMS) to its farmgate milk price for the 2018/19 season, bringing its average price to $5.98/kg MS.
Fonterra Australia managing director René Dedoncker said the increase will help support its farmers who are facing challenging conditions.
"Rising costs for feed and water due to the drought means that cashflow is even more critical for our farmers," he said.
"Receiving this increase in their milk payment now, rather than later in the season, will help our farmers make important decisions on input costs and plan for the remainder of the year.
"This milk price is reinforced by our strong Australian business which is performing well and generating repeatable returns, and is supported by tightening domestic supply of milk and the weakening Australian dollar."
However, Mr Dedoncker also noted that market conditions were putting downward pressure on the upper end of the forecast range announced in May.
The closing milk price forecast has dropped 10 cents to $6.10/kg MS
Read more in next week's Country News.