Bega announces opening milk price in line with other major processors

It announced an indicative opening milk price range of $7.90-$8.20 a kilogram milk solids for season 2024-25 for southern suppliers on June 3.

It represents a 11-15 per cent drop on last year's price.

It follows Saputo Dairy Australia (SDA) announcement on May 31 of an opening milk price of $8-$8.15/kg MS for season 2024-25 - a 12-14pc drop on last year's price.

Fonterra was the first processor to announce an opening price - with a price of $8/kg MS announced on May 30.

South Australian processor Beston announced an average weighted opening price $7.80-$8.10/kg MS, a 13-16pc fall.

The company has struggled in recent months, delaying 15 per cent of milk payments to dairy farmers in April and May.

Chief executive officer Fabrizio Jorge in a letter to suppliers said Beston had had to overcome "very challenging conditions as SA's largest dairy processor".

"The so-called disconnect of the Australian milk price versus key export markets like New Zealand have been on average $2/kg MS throughout the FY24 season," he said.

"The impact of this differential has been felt across our entire organisation, alongside inflationary pressure on energy, labour, chemicals, freight etc.

"The Australian dairy industry has never seen such a level of pricing differentials with New Zealand milk prices and the consequences of such disparity has resulted in record imports of dairy into Australia, as well as poor competitive levels across key export markets."

Burra Foods has announced an $8- $8.50/kg MS price.

This is a fall of 90 cents a kilogram on last year's prices - or about 10pc.

"There have been a lot of changes to markets in the last 12 months and our flexibility has enabled us to take advantage of opportunities as they presented," CEO Stewart Carson said.

"We are very proud of our ongoing and significant contribution to Gippsland.

"We continue to heavily invest in new products and our plant to expand production capability."

Mr Carson said Burra was optimistic about the season ahead and its future growth.

Australian Dairy Farmers Corporation has opened at $8.20/kg MS.

This represents a 14.5pc drop on last year's price.

The price comprises $7.70/kg MS for July-December and $8.70/kg MS for January to June next year.

Supplier meetings will be held between June 5 and June 19 for farmers to ask questions of the ADFC board about the prices.

Bulla has announced an opening price range from $7.85- $8.65/kg MS depending on supplier profile.

This represents an 12-15pc fall on last year's price.

"This year has seen an unprecedented level of rising input costs, shifts in consumer behaviour and increased competition from imported dairy," CEO Allan Hood said.

"We recognise that any reduction in milk price will have an impact on our farmers and that we are not alone in this challenge.

"However, we will work hard to address this through portfolio innovation and continuous improvement."

Mr Hood said Bulla remained committed to being competitive at farmgate.

Union Dairy Company has opened at $8.10/kg MS, a 12pc drop on last year's price of $9.20/kg MS.

Australian Consolidated Milk has announced a $7.80-$8.20/kg MS opening price, citing volatile markets as the key reason for the 10-13pc drop.

The company said favourable weather conditions and increased milk supply had also provided challenges.

"We have experience a significant disconnect between global commodity values and domestic farmgate milk prices, leaving dairy ingredients from Australia at a competitive disadvantage in all markets," it said in a letter to supplier.

"We continue to see large producing regions like EU and US slow milk production due to various factors."

The company said as demand signals improved, it would have a "positive impact" on farmgate milk prices.