Milk prices on the line

Fonterra was the first processor to publicly declare its opening price of $8.60/kg of milk solids, stating it reflected improved global market conditions, dampened by a soft domestic outlook.

They also stated geopolitical tensions and potential trade disruptions, along with currency volatility continued to create uncertainty long term.

Fonterra Oceania managing director David Breckenridge told suppliers the Australian domestic market, (where most suppliers milk is directed) remains challenging.

“Inflationary pressures have yet to fully ease, and segments of Australian consumers continue to chase value through lower-cost dairy products,” David said.

“Foodservice channels, both locally and globally, are facing a multi-year recovery as even lower-cost restaurants are challenged as households eat out less.”

ACM opened with $8.85/kg MS and two days later upped its price to $9/kg MS.

While suppliers welcomed the increase, many were left asking what had changed in just two days to warrant the increase?

In their second communication to suppliers, ACM said it was committed to a competitive market milk price and the new opening price was a reflection of that position.

Burra Foods announced an opening range of $8.60 to $9.10/kg MS, while Saputo Dairy Australia announced an opening weighted average price of $8.80 to $8.95/kg MS for the 2025-26 season.

Saputo said it would continue to support its farmers with flexible payment options and tailored programs including a flat monthly payment structure for greater cash flow consistency, along with access to supplier investment rebates, the AG Warehouse Loyalty Program, and a growth payment on any net increase in a farm’s milk solids.

Milk supply and planning director Kate Ryan said the opening milk price reflected stabilisation of global commodity prices, offset by sustained domestic market challenges.

“While we are optimistic there are long-term opportunities ahead, we are mindful of prevailing headwinds,” Kate said.

“As the 2025-26 milk year is only just beginning, we will review our farm gate milk prices during the season and pass on step-ups where it is supported by greater certainty across key markets and product categories.”

Bega was the last of the major processors to announce with a price range of $8.70 to $9.12/kg MS

Bulla Dairy Foods opened at $8.40 to $9.20/kg MS, acknowledging suppliers want to see farm gate prices increase and saying they aim to grow domestically and internationally through their celebrated brands.

Goulburn Valley Creamery has invested $20 million in its Kyabram facility and is looking for an additional 140 million litres of milk.

They opened at $9 and chief executive officer Mancel Hickey said the business was looking to expand markets for Goulburn Valley farmers.

“We are really looking to do things a bit differently to the rest of the industry, and that’s reflected in how we work and engage with our suppliers,” Mancel said.

United Dairyfarmers Victoria president Bernie Free said farmers were being forced to de-stock and take on more debt just to keep operations running.

“It’s putting a real strain on their mental health.

“Processors need to recognise that an aggressive cost-of-production environment demands a stronger pricing commitment,” Bernie said.

What they’re offering

Dairy processors have opened their 2025-26 farm gate milk prices above last year’s offers, but not as high as 2023-24.

Many processors are also seeking more milk supply for the coming season.

The prices have been largely condemned by dairy farmers and farming groups.