New data on Milk Value Portal offers greater insights into milk price

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Milk price data for the 2021/22 season is now available on the Milk Value Portal (milkvalue.com.au), giving a greater understanding of the prices being paid by dairy processors to farmers than ever before.

This is the first major data update since the Portal first launched in November 2020. The Milk Value Portal was established by the Australian Dairy Products Federation (ADPF) with the support of processers. It provides farmers with more detailed information about how milk price is calculated and the value of their milk in each region. Its goal is to increase transparency in the industry between farmers and the processor.

The updated information to the Milk Value Portal provides visitors with new insights into where opening Farmgate Milk Price (FMP) has landed relative to the Australian dollar-based Commodity Milk Value (CMV). CMV is an important indicator to estimate milk price, which is calculated based on a weighted basket of commodities converted to an Australian dollar-denominated value of milk. This is just one indicator available on the Milk Value Portal that farmers can look at to get a better understanding of raw milk price.

In June 2020, the markets were very choppy and CMV was mid-way through a steep decline led by an appreciating Australian dollar, driving Southern Region opening prices to be slightly less than the 52-week average CMV. Twelve months later, in June 2021, the world is a very different place with elevated and more stable commodity prices, and this is reflected in Southern Region opening prices that are more than $1/kg MS (20%) above CMV.

The Milk Value Portal provides fresh insights into the value of milk throughout the eight milk production regions and highlights the competitive nature of the market, as well as the ongoing premiums available in the northern region and WA – the fresh/milk-drinking markets.

Farm size and production seasonality remain important, with larger farms with a less seasonal production curve attracting significant premiums.

Grant Crothers, President of the ADPF, doesn’t pretend that FMP across the eight milk production regions is easy to understand and encourages farmers to spend time on the Milk Value Portal to understand the different factors influencing the milk price.

“The new data on the Milk Value Portal allows visitors to see current and historical changes, now featuring three years’ worth of data and gives farmers a more in-depth understanding of what factors impact the price of raw milk."

“Another year of high milk prices being offered by processors to dairy farmers is good news for agriculture and great news for dairy. It appears we are in a super cycle – a third year of what is likely to deliver record prices for raw milk.

“Demand from the processing sector for raw milk continues to be strong, enhancing prices and providing advantages to dairy farmers. In addition, the recent softening of the Australian dollar is good news for FMP supporting processors decision to ‘go hard’ at opening.

“Initiatives like the Milk Value Portal are helping increase transparency between farmers and processors and it is creating a more united dairy industry, restoring trust and industry confidence,” said Mr Crothers.

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