The lift of 16 cents per kilogram of butterfat and 40 cents per kilogram of protein brings the average price paid by the company to $6.64 per kilogram of milk solids (kgms) for suppliers in Victoria and Tasmania.

Fonterra has also raised its full-season forecast to the range of $6.80-$7.00/kgms.

The strong price lift is Fonterra’s fifth for the season and the third rise of this size, made possible by tight global supply of dairy commodities.

Fonterra says demand remains strong from its key export customers, particularly in Asia where Fonterra has a strong network. 

Fonterra Australia managing director Judith Swales said the company has led its competitors on milk price this season.

“This announcement will hopefully give our farmer suppliers the confidence to invest on-farm for growth so they can capitalise on opportunities for next season,” Ms Swales said.

Rival Murray Goulburn is paying a weighted-average price of $6.53/kgms following a step-up this month and is forecasting a full season price of up to $6.70.

Warrnambool Cheese and Butter made its most recent increase in January to $6.40/kgms and was then forecasting a full season price of $6.50/kgms.

shynes@fairfaxmedia.com.au