Opening milk prices a confidence-booster, says UDV boss

VICTORIA’S top dairy farmer says strong opening prices will inject some much-needed confidence in agriculture after a tough few years.

United Dairyfarmers Victoria (UDV) president Tyran Jones said many in the industry were pleased processors were passing on a greater share of returns to suppliers.

He said improved opening prices from both Fonterra and Murray Goulburn showed the dairy sector was starting to reassert itself. “We are starting to see far better prices paid per kilogram of milk solids than we’ve seen in a long time,” Mr Jones said.

“That’s despite having to push up against a historically strong Australian dollar, which is making us less competitive.

“What we do have as Victorian dairy farmers is a strong brand, a brand people trust overseas and we’re really starting to make inroads in to places like China and elsewhere.” 

His comments follow Murray Goulburn (MG) upping the ante in the opening price battle, revealing it will pay $6 per kilogram of milk solids.

MG has also predicted a price in the range of $6.15 to $6.30 per kilogram for milk solids by June 2015 as its end price for the upcoming financial year.

The dairy co-operative says the 2014-15 financial year opening price is a 7 per cent increase on the 2013-14 figure and has been driven by internal efficiencies.

MG chief executive Gary Helou said there had been strong demand for Australian dairy produce but the market sentiment had softened due to increased supply from New Zealand and the United States.

“Despite this softening we have been able to deliver the highest opening milk price on record and one of the highest year-end forecasts on record,” Mr Helou said.

Fonterra also announced on Wednesday evening an opening price of $5.80 per kilogram of milk solids.

While opening prices are up for both companies, closing prices projected by the two milk processors are less than those anticipated for the present season.

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