With opening milk prices announced, dairy farmers across the country are busy working out what it means for their business moving forward, particularly in light of increasing cost pressures around fertiliser and diesel.
Processors opened with prices as low as $8.60kg/ms for Lactalis Mainland Dairy and $8.80kg/ms for southern Saputo suppliers, and as high as $12.47 for Lactalis suppliers in Queensland.
Both Saputo and Mainland were quick to update their prices to just above $9 kg/ms, which is where the majority of other processors opened.
South Australian dairy farmer Brad Fisher supplies a main stream processor and some niche markets as well.
He said the opening price was good, but not great, and did not reflect the challenges of diesel and fertiliser.
“We crop 3000ha, so we are copping a hit on that front as well,” Brad said.
While Brad commended Lactalis on their farmer support payment of 5¢/litre from July to September, he would like to see the payment extended.
“I can’t see any of these issues resolved before September and you can’t take to your bank a milk price that stops in September.”
On a positive note, he said his farm had recently received its best seven days of rainfall in three years, and he is choosing to look at the cup half full rather than empty.
“We have had three years of drought, and the Bestons disaster to cope with, which cost us $750,000, and we are just wanting to move our business forward,” Brad said.
Gippsland dairy farmer Maree Deenen was happy with Bulla’s opening price, which didn’t go down, and opened the same as her closing price.
“On the grass side, things are looking really good for us — water is just our issue,” Maree said.
“We are getting enough rain to keep the grass growing, we just need rain to fill the dams.”
Alpine Valley farmer Ebony Mull supplies Mountain Milk.
“It’s so draining to chase milk prices every year – with Mountain Milk, it is someone else’s worry, because as farmers, we have so many other things to think about as well,” Ebony said.
“We have a good autumn and the cows are milking and joining well — we are having a strong start to the season.”
Gunbower couple Stephen and Brooke Brown said it was a tough and ruthless game at the moment.
“The only weapon farmers have is the choice of who they supply,” Stephen said.
“I think most of the processors are well aware of that, because I’m not hearing much talk of multi-year contracts.”
Australian Dairy Farmers is pushing for greater transparency in milk pricing.
ADF president Ben Bennett said the current environment highlighted long-standing concerns about transparency in milk pricing — one of the key principles underpinning the Dairy Code of Conduct.
“This is perhaps the most important commercial decision farmers make each year, yet many are still being asked to sign contracts without a clear, comparable understanding of what they’re being paid,” Ben said.
“We’re continuing to see increasingly complex pricing structures stacked with incentive payments and disincentives, making it difficult for farmers to determine whether they’ll actually be able to balance skyrocketing input costs and break even in the new financial year.”
Ben said ADF had consistently raised the need for clearer, more transparent pricing mechanisms.
“We have been raising this issue for years, and the offerings we’ve seen from processors this season reinforces why stronger transparency measures are needed,” he said.
While the Dairy Code of Conduct was designed to improve fairness and reduce information asymmetry in the market, and progress has been made, ADF said the experience this year demonstrated these objectives were not yet being fully realised in practice.
“Transparency isn’t a ‘nice to have’ — it’s fundamental to a fair and functioning market,” Ben said.
“It’s akin to asking everyday Australians to commit to taking a new 12-month job without knowing what their hourly rate will be.”
ADF is calling on processors and regulators, including the ACCC, to closely examine current milk pricing practices and ensure they align with the intent of the code.
As the contracting period concludes, ADF emphasised that improving pricing transparency would be critical to strengthening confidence in the market and supporting the long-term sustainability of Australian dairy farming.
“Given this complexity, it’s critical farmers seek independent qualified advice and, if possible, compare offers from multiple processors,” Ben said.