The plan for a Commodity Milk Price Index was announced last year by then Federal Agriculture and Water Resources Minister Barnaby Joyce, with an allocation of $2 million to initiate the program.

The aim of the index is to give dairy farmers a benchmark to assess the price being offered by processors, and trends in global and domestic markets.

The plan moved a step closer late last month with Webber Quantitative Consulting Pty Ltd announced as the successful bidder for the government tender to set up the index.

UDV president Adam Jenkins said it supported the development of resources to assist dairy farmers interpret price signals but wanted more information about what the index would provide.

“We will need to see more detail around the proposal, and until Webber Quantitative has met with industry, we can’t dispense judgment,” Mr Jenkins said..

“The Commodity Milk Price Index is intended to be one tool among a range of data sources that will help farmers better forecast and plan for the future,” he said. 

Other reforms such as the Code of Practice and the Effects Test and the Unfair Contract Terms Law for Small Business would also help spread risk along the supply chain, he said.

Mr Jenkins said the reforms would allow farmers to make better informed judgements on whether the prices offered by processors were fair and competitive.