Dairy processors in Australia have revealed farmgate milk prices that are 6-9% lower than the current season’s anticipated pricing, however WA dairy farmers are not suffering the consequences like their colleagues in the Eastern States.
In reality, the national trend may not be mirrored in the local market, as Cowaramup dairy farmer Bob Biddulph said the 4 per litre hike from Brownes Dairy was “welcome” after WA prices had already been “historically high.”
“We’re not complaining,” Mr Biddulph said.
“While there has been no cost relief with fertiliser and feed, milk prices have been at an all-time high for quite some time.”
Mr Biddulph said that he hoped to average 65/L throughout the course of the year, but that it varied according on the season, particularly during the winter when the price was lowest but production was greatest.
“The price varies according to the time of year — highest in summer, lowest in winter/spring, and with shoulder periods on either side of summer,” he said.
“It will also vary according to individual farmer’s butterfat and protein percentages, as well as milk quality.”
He described the previous two years as “buoyant,” particularly with meat prices high, albeit they had “come back a bit” lately.
Bob Biddulph, a dairy farmer from Cowaramup. Image: Cally Dupe
Bob Biddulph, a dairy farmer from Cowaramup. Image: Cally Dupe
According to Brownes Dairy chief operations officer Marc Anderson, it was almost difficult to determine how WA farmgate prices compared to those paid in the eastern states since, although announced on June 1, they were “already changing upwards due to the severe competition for milk.”
“I believe WA milk prices are at the lower end of the range when compared to Victorian milk prices, but who knows where that will be this week!” Anderson said.
He said that any farmers who are presently on multi-year contracts or who sign new contracts with Brownes Dairy would get a 4 per litre boost.
WAFarmers Dairy Section president Ian Noakes said that although processors were required to declare their planned pricing on June 1 each year, it was a convoluted affair that was not always simple for farmers to figure out.
While he was still trying to get his mind around the latest farmgate pricing being offered by different corporations, he hadn’t gotten any calls from WA growers who were worried about them.
According to the Australian Dairy Products Federation, farmgate milk prices for 2023/24 are mainly lower than anticipated pricing for the current season, “with adjustments to initial offers still being made.”
Dairy processors in the eastern states were charged between $8.65kgMS and $12.22kgMS, depending on the contract, quality, and production location.
The business said in the inaugural edition of the Elders Dairy Market Update that opening milk prices for 2023/24 “may not be the outcome producers were looking for.”
According to the research, firms were providing opening prices that were 6-9% cheaper than the current season’s pricing.
“Because of supply reductions, competition for milk supply remains very high in Australia, implying that farm gate milk prices are somewhat disconnected from the global market,” Elders stated.
“Despite the drop in 2023/24 opening prices, farm gate milk prices remain above long-term averages.”
“However, producers have faced rising input costs and limited labour availability, which has squeezed profit margins.”
“These factors, combined with rapidly rising land prices, have led to the expectation that milk supply will fall again in 2023/24, further increasing competition for milk supply.”
According to the latest Economic Impact Report from the International Dairy Foods Association (IDFA), the US dairy industry has grown significantly over the last two years, adding nearly 60,000 new jobs, increasing average wages by 11%, and increasing its total impact on the US economy by $41 billion.
