Opening milk prices disappointing
Opening farmgate milk prices, announced last week for the 2026-27 season, have been labelled disappointing by local dairy farmer Joe Meggetto and the United Dairyfarmers of Victoria.
by Courtney O'Brien
Opening farmgate milk prices, announced last week for the 2026-27 season, have been labelled disappointing by local dairy farmer Joe Meggetto and the United Dairyfarmers of Victoria.
Under the Dairy Code of Conduct, Australia's dairy processors had a June 1 deadline to announce minimum prices they will pay to dairy farmers.
Of the 12 processors who Gippsland farmers supply to, opening prices ranged from $8.50 to $10.38 per kilogram of milk solids (kg/MS).
Mr Meggetto has a 350 head dairy herd in Warragul South and has been supplying Burra Foods for 10 years.
Burra Foods opening prices sat between the overall range, offering between $8.90 to $9.40 kg/MS, lower than what Mr Meggetto was expecting.
"I'm a bit disappointed on how it's finishing below the finishing price of this year," he said.
"For me personally, we're about five per cent lower on our finishing price. To me that's a bit over $100,000. The question is - would you take a $100,000 pay cut?"
Mr Meggetto believes Burra Foods had factored in inflation, to a degree.
"I understand they've got rising costs as well. We all run our own businesses and they've got rising costs, and so have we, but it's been like this for a lot of years - that the rise of our cost is not keeping up with the milk price.
"The milk price needs to be a little bit higher to make it more viable for the dairy farmer," he said.
With strong global demand for dairy, Mr Meggetto is hoping to see a step-up in price during the season.
"I suppose the way the world is going at the moment, there is uncertainty, but the demand for dairy products across the world is certainly there.
"I remember two or three years ago that there were two or three step-ups between June 1 and June 30, to finish the opening price. Last year there wasn't anything. But this year I'm hoping there might be one or two, but we'll just have to see what happens in the next three weeks."
Australian Dairy Farmers president Ben Bennett said the prices were a starting point for famers who had a month to negotiate. But, Mr Meggetto said he traditionally didn't negotiate and wouldn't be shopping around for the best price.
"There's not much room for any farmer to negotiate with anyone really. It's always been said, we're price takers. There's not much really, we can do."
"I know there's people out there that chop and change every year, but I think it's always the same, that the price structure that the companies have got are all confusing for the farmers, so it's not made easy for the farmer to go and get the best price.
"Overall, it's a bit disappointing that it didn't start where it finished," he said.
Burra Foods chief executive officer Stewart Carson said the announced range acknowledged the challenges being faced by milk supply partners, while also reflecting risk and volatility in markets.
"We know many dairy farming businesses are continuing to operate in a challenging environment, and this opening minimum price range is intended to provide a solid starting point for the season ahead," Mr Carson said.
"Our focus remains on working closely with our milk supply partners, supporting sustainable milk production and building long-term value for farming families and regional communities."
With dairy farmers facing spiralling costs of fertiliser, fuel and feed, United Dairyfarmers of Victoria (UDV) president Bernie Free is calling on processors to lift their prices.
"We're extremely disappointed with initial opening milk prices at a time when dairy farmers are facing skyrocketing on-farm costs. This price announcement doesn't even factor in inflation or any of the costs of global instability. We must see this price stepped up in the coming weeks to ensure the viability of dairy farmers and processors in these turbulent times," Mr Free said.
"Less milk supply will put pressure on processors, as farmers consider their future moving forward. This move by the processors could lead to a downturn in the milk pool, as farmers consider their options. Farmers will be considering their options if these prices don't rise."
Saputo Dairy Australia (SDA) announced prices on the lower end of the scale ranging between $8.80 to $8.90 kg/MS.
SDA milk supply and planning director Kate Ryan said SDA would review milk prices during the season as certainty across key markets and product categories improved.
"We have invested in flexible pricing options and expanded partnership programs, including rebates and incentives designed to enhance on-farm profitability, productivity and sustainability. Farmers can tailor their payment structure, incentives and supplier programs to suit their farm profile and support on-farm cash flow," Ms Ryan said.
Woolworths Group were at the lowest end of the price range at $8.50 per kg/MS for exclusive and non-exclusive supply and Coles were at the higher end, offering $10.38 kg/MS.
Other Gippsland supplied processors were offering price ranges over $9 kg/MS, including Lactalis-Mainland Dairy $8.65-$9.45, Bega $9.04, Australian Consolidated Milk $9.10, Bulla $9.15-$9.95, Frestine $9.39, Australian Dairy Farmers Corporation $9.50 and Goulburn Valley Creamery $9.80.
