Milk money

DAIRY farmers have witnessed their first milk price step-up for the season, but the industry has expressed dissatisfaction with a revised forecast price.
Nanjing Night Net

Australia’s largest manufacturer of dairy products, Murray Goulburn, was the earliest to announce a price boost last week of eight cents a kilogram of butterfat and 20c/kg protein.

But managing director Gary Helou said softening world market prices compounded by a strengthening Australian dollar remained a big concern for the cooperative.

“Given the current uncertainties in the market place, we believe the final weighted average milk price should be about $5.30/kg of milks solids, which is at the lower end of our previously indicated range,” he said.

Following Warrnambool Cheese and Butter’s annual general meeting on Friday, the processor said it would also lift milk prices by 8c/kg of fat and 20c/kg protein.

But the country’s oldest processors told shareholders it maintained a “cautious” approach to the second half of the year.

“The market is volatile and we want to make sure we’ve got dollars in the bank first,” WCB chairman Frank Davis said.

“Commodity prices are holding up well and as long as exchange rates don’t go completely haywire, we can be fairly confident of providing solid prices for the rest of the year.”

But he said the news wasn’t all bad, with production looking “good”.

“We’re getting all the milk we need,” he said.

“And we’ve been able to recruit 30 new suppliers since the start of the year, which equates to about 70 million litres of milk.”

United Dairyfarmers of Victoria (UDV) deputy president Ron Paynter said there was still a great deal of uncertainty on the international dairy scene, but dairy farmers were initially crossing their fingers for a firm forecast price.

“It is disappointing that the projections by Murray Goulburn will be at the lower end of the projected range,” he said.

“A milk company revising downwards is a rarity.”

Although many dairy farmers remember only too clearly the shocking slash in prices following the global financial crisis in 2009, Mr Paynter did not expect the same situation to occur again.

“That was a one-off,” he said.

The price news comes as the Senate findings from the “milk wars” are expected to be handed down today.

While the Australian Competition and Consumer Commission cleared the supermarkets of any misconduct in cutting its home-brand milk price-tag to $1/L earlier in the year, the Senate inquiry will reveal if any serious damage has been done to the dairy industry.

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