Ann: FY18/19 Milk Supply Contract Prices, page-6

Yesterday, AHF announced its farm gate 2018/19 opening price of $6.00/kg v $5.78/kg 2017/18 - all Group
farms.

So, how does this compare to elsewhere? For example:

27/6/18
http://adf.farmonline.com.au/news/m...l/opening-milk-prices-under-fire/2757414.aspx

• Analyst forecasts = $5.90 + (consensus) per kilogram milk solids.
• Saputo = $5.75.
• Fonterra = $5.85.
• Lion = $5.82.
• Lion (NSW) = $7.03
• Lion (QLD) = $8.01
• Rabobank forecast (full-year southern Australia) = $6.40
• Fonterra is forecasting a closing average milk price range = $6.20 at the upper end for the season
• 3% broad increase for 2018/19
• ABARE forecast = +2.1%

28/6/18
http://www.abc.net.au/news/rural/2018-06-20/more-dairy-farmers-set-to-leave-industry/9889406

• Murray Goulburn = Opened at $5.75 per kilogram milk solids for its southern milk regions of Victoria and Tasmania
• Murray Goulburn = 49.6 cents per litre for their suppliers in the NSW Sydney market region

1/7/18
http://www.abc.net.au/news/rural/2018-06-30/dairy-exodus-in-nsw/9924892

• Bega Cheese announced:
  • the 2018–19 opening milk price of $6.70 per kilogram of milk solids
  • 50 cents per litre for NSW producers
  • a 3 per cent increase on last year

16/5/18
https://www.countrynews.com.au/@dairy/2018/05/16/109253/processors-release-milk-prices

• Fonterra = Fixed Base Milk Price for the 2018-19 season will be $5.90/kg of milk solids

Fixed Base Milk Price is a price risk management tool that lets farmers lock in a set price for up to 70 per cent of the season’s milk before the season starts, which the company says provides a greater price certainty by helping to reduce farmers’ exposure to market volatility.

• Saputo (was) = Southern Milk Region and NSW. The increase of 5¢/kg butterfat and 11¢/kg protein takes the average farm gate milk price to about $5.68/kg, up from $5.60/kg, retrospective from July 1, 2017.
• Australian Consolidated Milk = announced a 2018-19 farm gate milk price of $5.90/kg milk solids, up 10¢ on this season’s closing price.

31/5/18
http://adf.farmonline.com.au/news/m...a-announces-550620-closing-range/2757338.aspx

• Fonterra Australia has announced a forecast closing farmgate milk price for the 2018/19 season in the range of $5.50 to $6.20 per kilogram of milk solids. This compares with this season's current forecast close of $5.62-$5.70/kg MS. Fonterra's current average weighted price is $5.62/kg MS.
• Farmers are also receiving an additional 40 cents/kg MS bonus, paid so Fonterra could fulfil the benchmark milk price agreement for the 2015/16 season. This takes the current average weight price being received by farmers to $6.02/kg MS.

9/5/18
https://www.weeklytimesnow.com.au/a...y/news-story/8b991d3e4dab5eadd66e0aa29d13a4c9

• Australian Consolidated Milk = will open the 2018-19 season with an improved farmgate milk price of $5.90 a kilogram milk solids. The new season price is 10 cents/kgMS up on this season’s close, as the Kyabram processor hunts for supply to build on its 350 million-litre milk pool. ACM has included options for a sign-on bonus for one, two or three years in an offer sent out to dairy farmers earlier this week. ACM general manager Peter Jones said the sign-on bonus of 9c/kg butterfat and 19c/kg protein was included in the average $5.90/kgMS.
• Organic (ACM) = The average weighed price for ACM’s organic milk pool for the new season is $8.01/kgMS

Now, given ACM’s organic milk pricing and AHF’s own farmgate price of $6.00 across all its farms, not certain where this really puts the organic strategy going forward. CDC is likely therefore to be experiencing more pain before any referable gain is secured.

Time will tell, but clearly a $6.00 price (if averaged out suggests an outcome at the lower end of the scales, not the mid to upper end, so therefore also at the lower end of securing share and /or in delivering any direct farming results). Therefore, not really a good result, at all.