Farmers call for opening milk prices to reflect market value

Thursday June 15 2017
FONTERRA’S opening price announcement today garnered a mixed response from Victoria’s peak dairy group.

The United Dairyfarmers of Victoria acknowledge a opening price of $5.30 per kilogram of milk solids, but criticised the processor and Bonlac Supply Company for public statements indicating a higher available opening price of $5.70/kgMS.

The higher price comes from a 40 cent loyalty payment borrowed from future earnings as a way of compensating existing, retiring or recommencing suppliers for a disastrous 2015/16 season.

UDV President Adam Jenkins said the dairy group was alarmed by the comments and demanded both companies be transparent in setting their opening price and promoting it to suppliers.

“Fonterra has publicly announced an inflated opening price which does not reflect the current market price and is not available to new suppliers,” Mr Jenkins said.

“The comments are nothing but misleading, and at a time when the dairy industry has committed to rebuilding trust along the supply chain, they are unhelpful in our effort to create a transparent milk price for the dairy industry.”

Mr Jenkins said the statements showed inconsistencies in behaviour by Fonterra and BSC after neither company recognised the benchmark return set by Murray Goulburn last year at $5.53/kgMS.

“Fonterra wants to give the appearance that they are offering a more attractive price than any of the other processors at $5.70/kgMS, but it’s simply not true and Fonterra and BSC need to make that clear,” he said.

“Our industry landed in a very dark place 18 months ago for not reflecting the true market price in the farm gate returns and we do not want to land there again.”

UDV praised all processors for releasing their opening prices before the start of the season in July, in line with a motion passed at the dairy group’s May conference.

Media Contacts:
Adam Jenkins, UDV President: 0437 008 806
Ashley Mackinnon, VFF Public Affairs Officer: 0417 165 784