Australian dairy processors making strides toward greater farmgate milk price transparency

With over 25,000 visits to the Milk Value Portal since its launch and latest survey data finding the site has helped improve 65 per cent¹ of users’ understanding of farmgate milk pricing, dairy processors are well on their way towards providing farmers with greater transparency on pricing and the value of milk.

Established in November 2020, the Milk Value Portal has been operating now for 12-months, continuing to provide the Australia’s dairy industry with a credible, single source of verified information on farmgate milk pricing across Australia’s eight milk production regions.

Led by the Australian Dairy Products Federation (ADPF), the Milk Value Portal is now a well-established source of information for farmers and broader industry stakeholders which includes the Farmgate Milk Value Tool – an interactive tool based on current and verified processor data that allows farmers to calculate the average value of raw milk in each production region.

“The Farmgate Milk Value Tool lets the visitor customise a farming enterprise by selecting regional location, farm size, seasonality of supply and butterfat and protein content, calculating a milk price for the year and for each quarter. You can then create any number of ‘what if’ scenarios to obtain a deeper understanding of current and historical farmgate milk pricing,” Mr Crothers said.

“Farmgate milk pricing has a multitude of factors influencing it across the different regions throughout the year, and it was a need for more transparent information that drove the development of the Milk Value Portal.

“Understanding market volatility and the value of milk through processor data not only enhances transparency but also helps optimise decision making and the development of more sustainable dairy farming and processing enterprises.”

The Milk Value Portal was developed, and all data is collated and kept up to date, by independent food industry analyst, Freshagenda.

Freshagenda Director Steve Spencer said the Milk Value Portal offers fresh insights for how global prices and pressures for dairy commodities influence farmgate milk prices in our own backyard.

“At the moment, the Milk Value Portal is showing us that commodity prices are rising due to tight milk supplies in Europe, a smaller than usual peak in New Zealand production, and a slightly softer AUD pushing up the gross Commodity Milk Value,” Mr Spencer said.

“Farmgate milk prices may follow if companies are well placed to be able to take advantage of this with the right product and market mix.

“The Milk Value Portal also shows the small step-ups of farmgate milk prices recently made by some Australian dairy manufacturers. The commodity price rise is helping to ease tensions processors are facing with firm milk costs and rising input costs.”

ADPF Executive Director Janine Waller said that the Milk Value Portal was part of the ADPF strategic plan and commitment to offer greater transparency and insights for all stakeholders, increasing trust and understanding of farmgate milk pricing and the value of milk.

“Over the next year, we will focus on education to increase farmers’ understanding of the factors that influence pricing, and supporting them to understand what really matters to their farming system and why.

“The ADPF and dairy processors look forward to continuing to work closely with government and industry stakeholders to optimise the success of the Milk Value Portal and increase transparency between dairy farmers and processors, to create a more united dairy industry,” Ms Waller said.

To access the Milk Value Portal, visit: milkvalue.com.au.

ENDS

1. Gathered through the Milk Value Portal Survey November 2021, receiving data from a small sample size of users