Federation explains low farm gate price

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Photo by Holly Curtis

The Australian Dairy Products Federation says this year’s lower farm gate milk price has been set to preserve the viability of the dairy industry.

The federation, representing dairy processors, pointed to the flood of imported dairy products that followed several years of record high milk prices.

Federation chief executive officer Janine Waller said during the 2022 and 2023 year, imports surged by 17 per cent, leading to the highest-ever consumption of overseas dairy products in Australia, nearing 30 per cent or 344,000 tonnes.

“We want to ensure Aussie families can continue to enjoy affordable, locally made and branded milk, cheese, yoghurt, butter and ice-cream in their homes,” Ms Waller said.

On July 1, the estimated weighted average farm gate milk price in the southern region ranged from $7.94 to $8.20/kg milk solids.

“Following two years of record high farm gate milk prices, this remains up to 14 per cent higher than it was three years ago (financial year 2021-22),” Ms Waller said.

“Compared to the farm gate milk price paid by major global competitors, the southern Australian price remains at a premium.

“It is up to 10 per cent higher than New Zealand’s milk price midpoint of A$7.43/kg milk solids.

“It’s important to remember the announced farm gate milk prices are minimums for the season, with incentives on offer and the possibility of price reviews as global market conditions improve.

“We encourage farmers to use the dairy industry’s milk value portal which provides transparent and comprehensive data on farm gate milk pricing, offering insights into current and historical rices and market trends.”

Latest figures released by Dairy Australia show cheese exports are rising, in value and tonnages.

However, two of the bigger categories — skim milk and whole milk powders — are lower than the same time last year.

About 30 per cent of Australian milk production goes into exports.