VICTORIAN dairy farmers were beaming last week, thanks to milk companies lifting their farm-gate prices.
The week earlier, Fonterra Australia announced a boost in prices for its Victorian and Tasmanian suppliers by eight cents a kilogram of fat and 20c/kg of protein, which equates to 13c/kg of milk solids.
Despite turmoil on the global financial scene, general manager milk supply Heather Stacy said Fonterra had performed well due to its balanced mix of brands, customers and markets.
"We are experiencing strong demand from our bulk ingredient and export customers, particularly across high value product categories such as nutritional powders," she said.
"Dairy commodity prices have remained firm over the past couple of months – well above the US$3000 per tonne mark – and we are pleased to have made the most of this for the benefit of our farmer suppliers."
Fonterra's latest price increase represents an additional $16 million in the pockets of its suppliers, with the company hoping to close well within Dairy Australia's forecast final price range of $5.10 to $5.50/kg milk solids.
South-west Victorian processor, Warrnambool Cheese and Butter, also announced a step-up on Friday to $5.20/kg milk solids.
WCB managing director David Lord announced a rise of 8c/kg butterfat and 20c/kg protein in a letter to suppliers.
Another milk price review for WCB suppliers will be due in April.
"At this time we will consider our business performance and dairy market conditions," he said.
Gippsland producers will also be benefiting from the price increases, with Burra Foods announcing a second step-up for the season of 10c/kg fat and 25c/kg protein.
Chief executive officer Grant Crothers said this equates to an increase of 17c/kg of milk solids and lifts Burra Foods' average annual price to more than $5.05/kg milk solids.
"We should all be concerned over the economic issues in Europe and ask what they may mean for our businesses, however I can't see a meaningful impact on global dairy prices the short and medium term hence our outlook remains positive," he said.
United Dairy Farmers deputy president and Ellinbank farmer Ron Paynter said the price news was timely for producers.
"A lot of farmers will be facing additional costs at this time of year," he said.
"Some areas experienced pasture damage from wet conditions last season and will be facing big renovation and fodder bills right now."
On a global scale, Mr Paynter said the "nervousness" remained, but was pleased to see it had not impacted on Australian prices.
"Australian prices have been holding up better than we anticipated, which gives me some confidence it will stay that way until the end of the season," he said.
Meanwhile, Australian Dairy Farmers (ADF) has called on the Federal Government to respond to the recommendations of the Senate Economics References Committee's minority report into the retail supermarket milk war.
This comes more than a year after Coles dropped its home-brand milk price to $1 a litre.
"This is a continual annoyance that our quality product is being sold below what it is truly worth," he said.
Contracts between supermarkets and milk companies are currently being renegotiated, which could in turn influence farm-gate offer prices.
Although the biggest effects were being felt in Queensland and NSW, Mr Paynter said confidence in the dairy industry had been rocked in Victoria too.
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