Get quotes from all processors and be decisive!

All processors have now released their starting milk prices for 2023/24 and it is time for all dairy farmers to properly explore their options. All farmers who are off contract should speak to all processors who may want their milk and get estimates from everyone before making decisions about their future.

As reported last week, Lactalis has announced a 5c/L reduction in price to around 82c/L on average. Norco, DFMC and Bega have all lifted payments to farmers by around 1c/L and all are estimated to average around 88c/L. However, there is no such thing as an average farmer so there will be great variation as to which processor would pay an individual farmer the highest price which is why you must get actual estimates from everyone.

If farmers can pool together to form a considerable volume of milk, this will assist greatly in discussions with processors. The larger the volume of milk the greater the incentive for processors to pay a higher price and therefore the higher the price that farmers can achieve. At least 10ML is required to gain significant bargaining power for farmers. But having 20ML will significantly increase what a processor would pay since it would solve their milk shortage problems with 1 transaction.

I strongly encourage dairy farmers to be proactive and sign a contract that is commercially attractive. There is a 14-day cooling off period so if another processor offers a higher price and the processor you signed with won’t match, you can rescind the contract and sign with someone else.

Farmers need to act commercially and as a result encourage processors to do the same.

Eric Danzi, CEO eastAUSmilk