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Fonterra step-up promotes confidence, MD says

Strong export demand continues

March 11, 2014 11:00am

A closing price of $7 this season would encourage dairy farmers to invest in their farms' growth, Fonterra Australia says.

Fonterra Australia has tipped its closing price range will average $6.80 to $7 kg/ milk solids and give farmers confidence to invest in farm growth.

This morning Fonterra announced a step-up of 16¢/kg of butterfat and 40¢/kg protein for the 2013/14 season for suppliers in Victoria and Tasmania.

This brings Fonterra Australia’s current, average farmgate price to $6.64 per kilogram of milk solids (kg/MS).

It was Fonterra’s third step-up this season and fifth overall, coming as global supply for dairy remains tight and strong demand continues from Fonterra Australia’s key importing countries and customers, especially in Asia.

“We have led our competitors on milk price this season and in delivering cash on farm when it counts,’’ Fonterra Australia managing director Judith Swales said.

“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.

‘‘It’s just another part of our commitment to making Fonterra Australia suppliers the most profitable dairy farmers in Australia, and we are always actively looking for more suppliers to join us.’’

Ms Swales said the company was working hard to give suppliers a line of sight on market factors that will affect global supply and demand next season.

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