The United Dairyfarmers of Victoria has acknowledged the release of the Federal Government’s much awaited Milk Price Index.
Launched last week by Minister for Agriculture and Water Resources David Littleproud, the Index is aimed at helping dairy farmers better understand and interpret commodity market price signals, to ultimately make more informed business decisions.
“The Milk Price Index is intended to be one tool amongst a range of data sources that will help farmers better forecast and plan for the future,” said UDV President Adam Jenkins.
“The Index will help farmers focus on the trends of the world market and how that aligns with the Farmgate Milk Price. The Index allows farmers to track commodity prices received by Australian dairy processors” said Mr Jenkins.
The Index will include a one-year forecast of prices that will be updated each quarter, along with regular global, national and regional commentary.
Farmers are encouraged to provide their price data via the Index website to help build a Regional, Retrospective Farmgate Milk Price Index.
Mr Jenkins said the Index should allow farmers to make more informed judgements on the fairness and competitiveness of prices offered by their processor, whilst providing earlier and clearer pricing signals.
However, Mr Jenkins noted that the index would fall short of providing transparency in the processing sector.
“With the Index, we’ll have information about the world market and farm gate prices, but we’re still lacking transparency into manufacturing costs and their impact at the farm gate. UDV advocates for transparency throughout the entire supply chain and we are disappointed the Milk Price Index does not achieve this.
“As an outcome of the Federal Government’s review of the Index, we would like to see analysis of manufacturing costs to give farmers a clear idea of how the world price translates into farmgate milk prices” said Mr Jenkins.
Educational material is being produced by RM Consulting Group, which will be delivered to farmers at dairy industry events.
The Milk Price Index is managed by the Department of Agriculture and Water Resources, with economic modelling and analysis conducted by Deloitte Access Economics.
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