Opening milk prices bring mixed reactions

By Sophie Baldwin

Lactalis has topped 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.

Monique Bryant is a Lactalis supplier at Waaia in northern Victoria, and she said the opening price gave her great confidence in the processor and their future.

“We had some conversations with Lactalis after COVID-19 and the fact they have honoured their price gives us some real confidence,” Mrs Bryant said.

“We want to stay and grow in the industry and moving forward we have a good milk price to support that.”

Sarah O’Brien, from Denison in Victoria's Gippsland region, is a former Murray Goulburn supplier who stuck with Saputo.

She said Saputo's $6.40 opening price would allow their farming system to make a profit.

“I was concerned it was going to be below $6 so this is exciting times for us,” Mrs O’Brien said.

She said the opportunity to have a minimum opening price this early in the year was great for management.

“June 1 gives farmers the opportunity to change suppliers, get their budgets done or make decisions before the end of the financial year — it just puts farmers in a better position to plan.”

Muckatah dairy farmer Peter Letcher supplies Fonterra in northern Victoria, and said the opening price of $6.06 was below his expectation of somewhere between $6.20 and $6.50/kg MS.

He said while he can’t make any calls until his own farm estimation has been completed, based on last season it was a financial hit of about $220,000.

He also said it was a long way behind all the other processors.

Mr Letcher was planning on increasing herd numbers but he said at that opening price he wouldn't bother.

“My concern with processors coming out so low means they now have a fallback price of $6.06,” he said.

Dairy Farmers Milk Co-operative (DFMC) supplier Greg English, from Queensland, said according to his field officer, his milk price was the same as last year at 58.8 cents/litre.

“It is always good to be paid more and it always astounds me we talk of prices in one or two cents per litre and that’s not even in our currency anymore — what happened to five or 10 cents a litre?,” Mr English said.

“The price of milk can go up and it should; processors just expect us to take whatever they give us.”

Gunbower suppliers Stu and Clare Modra are happy with Bega’s opening price of $6.55, which includes a 15 cent/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.