Saputo Dairy Australia and Bulla Dairy Foods raise farm gate milk price for coming financial year

Saputo Dairy Australia and Bulla Dairy Foods have announced a rise in their opening farm gate milk price for the 2022-23 financial year.

On Friday evening Bulla announced the majority of its suppliers would receive between $9.30 and $9.50 per kilogram of milk solids.

The new price is an increase of 50 cents on the original opening figure Bulla announced in late May, which general manager of dairy and procurement Rohan Davies said was a guaranteed minimum for the coming season.

"Bulla is now confirming its supplier contracts as we get closer to the start of the new season, and we're pleased to announce this increase today as part of that process," he said.

On Saturday morning Saputo announced it had bumped up its non-exclusive minimum price to $8.80 per kg of milk solids.

"This is an increase of 21 cents per kilogram of butterfat and 42 cents per kilogram of protein. Our exclusive minimum milk price has been increased by the same rates," a spokesman said.

"The non-exclusive minimum price is the price we will pay monthly to suppliers for non-exclusive supply of premium quality milk in each of the northern region, south west Victoria and South Australia region, Gippsland region and Tasmania (including King Island). Exclusive milk supply agreements are available to suppliers in our northern region and south west Victoria and South Australia region."

The spokesman said the exclusive agreements offered suppliers an extra 10 cents per kg butterfat and 20 cents per kg protein (approximately 15 cents per kg milk solids), compared to the non-exclusive agreements.

In late May Saputo had announced an opening price of $8.50, so the new price represents a 30 cent increase as the market responds to rising prices throughout the supply chain.

Bulla and Saputo's prices are both significantly higher than the opening figure from Fonterra Australia of $8.25 per kg milk solids.

Fonterra director of farm source Matt Watt warned the rising farm gate prices along with rising supply chain and input costs for processing, packaging and distribution meant consumers would definitely see a spike in supermarket prices for dairy products.

Fonterra managing director Rene Dedoncker said the company would try to minimise the rise for consumers, wary of turning customers away from dairy.

"We don't want people deciding not to put that slice of cheese on their sandwich," Mr Dedoncker said.

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