Dairy

Milk prices met with optimism from local farmers

By Country News

Opening farm gate milk prices have been met with some optimism by dairy farmers around the region, with many hoping for a good season after years of drought and high production costs.

This was the first time the mandatory dairy code of conduct was put to the test, with all processors required to publish their milk price agreements online by 2 pm on June 1.

Lactalis topped the opening milk prices with a minimum weighted average price of $7.01, and northern Victorian supplier Chris Jones couldn’t be happier.

The Gunbower dairy farmer said this coming season was shaping up to be a good one.

“If we have a good season with plenty of grain and hay around at harvest, and if water price comes down to a sustainable level, we might finally be able to kick some goals,” Mr Jones said.

Unable to sow corn due to high water prices this season, Mr Jones is hoping the 2020-21 season will be a chance to put some fodder in the bank.

Muckatah dairy farmer Peter Letcher is a Fonterra supplier and said $6.40/kg of milk solids is where he thought the opening price would be.

He is disappointed the company initially opened at $6.06/kg MS.

“To all of a sudden find 34 cents means the money must have been there in the first place,” Mr Letcher said.

He hoped the doom and gloom was now behind him and the industry, after a great start to the season.

“We have made the decision to stay and we need to look at in a positive manner moving forward.

“We have good staff and the dairy industry is where we want to be.”

Gunbower suppliers Stu and Clare Modra are happy with Bega’s opening price of $6.55, which includes a 15¢/kg MS irrigation supplement payment.

“It’s a pretty good start, hopefully we can pay back some debt this year,” Mrs Modra said.

The Modras were able to sow all their autumn pasture on rainfall, making this the best start they have had since they bought the farm eight years ago.

“We just keep trying to survive — maybe this year we can do better than that,” she said.

Gunbower's Harry Rowlands supplies Australian Dairy Farmers Corporation (ADFC), and he was disappointed with its forecast of $6.20 to $6.60.

“The ADFC price won’t do anything to help confidence in the industry and I expect more farmers will exit,” Mr Rowlands said.

UDV president Paul Mumford said all milk prices being published at once caused some confusion for many dairy farmers.

“Those prices were the minimum milk prices that the processors will pay, but each processor has a different payment structure, which makes a chaotic approach to the announcement,” Mr Mumford said.

“Some processors don’t charge collection fees, however other processors have got additional incentives on top of the listed price.”

Mr Mumford said a streamlined approach should be used in future, by implementing a single location where all milk prices can be accessed.

“The good thing is that dairy farmers are getting this information at least a month earlier than other years, allowing them to do their due diligence on their milk price and farm system.”