This follows Bega Cheese and Burra Foods’ February 23 step-ups.
On Friday, March 5 Saputo Dairy Australia officially increased its minimum 2020-21 milk price by 7c/kg for butterfat and 14c/kg for protein.
The payment is retrospective and will be automatically applied to all qualifying milk supplied under the Saputo Diary Australia milk supply agreement.
The payment will be made to suppliers with their February 2021 proceeds this month.
This increase means the weighted average farmgate milk price for Saputo suppliers across Victoria and the Riverina has increased by 10 cents – from $6.40 to $6.50 per kilogram of milk solids.
It comes as Rural Bank's latest commodity update forecast predicts farmers will seek to take advantage of price increases and good seasonal conditions, with expectations of higher milk production.
The bank expects milk supply to increase as autumn conditions set in across the country.
Profitability is being driven by low input costs, step ups to milk price and low interest rates.
The bank said Chinese demand for dairy products was yet to be satisfied and further stockpiling of milk powder would keep prices high in March.
Supply continues to move higher in southern states driven by exceptional seasonal conditions for this time of year and an abundance of stored feed.
On mainland Australia, the absence of hot spells has decreased the reliance on stored feed and prolonged pasture growth particularly in Gippsland and south-west Victoria.
Strong global dairy prices have prompted two major processors to offer a step-up of 10c/kg milk solids, with the expectation that other processors will follow.
The increase in milk price combined with high chopper cow prices, low interest rates and low input costs continue to improve profitability in the industry, according to the Rural Bank
Feed grain prices are likely to remain flat this month with little variation in demand. Hay prices remain steady as demand is likely to remain subdued for the rest of FY21.