2018 pricing locked in and looking up

By QDO President Brian Tessmann

For many Queensland dairy farmers, this year’s pricing signals are much clearer than they were last year. This comes in light of Parmalat Australia’s joint announcement with the collective bargaining group Premium Milk last week of stable pricing for next year except that the seasonal incentive payment for July 2018 will be halved from two cents to one cent per litre. The announcement follows only a few months after the 2017 pricing was finally settled by an arbitrator at what amounted to a year-round reduction of just over 0.8 cents per litre.

While Queensland Dairyfarmers’ Organisation (QDO) and its members find any price reductions disappointing, the drop does reflect price reduction in the domestic market during this period, including with Lion’s Queensland suppliers and many of Parmalat’s suppliers in southern states. At least now local Parmalat suppliers, who collectively account for over half the state’s dairy farmers, know full well what to expect in next year’s pricing negotiations and can make business management decisions accordingly.

There was better news for Norco suppliers following the co-operatives AGM in Toowoomba last week. Chairman Greg McNamara reported that Norco had achieved a net profit of $1.122 million while managing to increase the average member return by 0.12 cents per litre. He noted much of this stemmed from an increase of 2.7% in total sales and an increase of 34.6% in Norco’s branded milk sales. QDO believes at least some of that increase in branded sales has derived from QDO’s industry leading ‘I buy branded milk’ campaign. Mr McNamara also welcomed new CEO Ben White to the co-operative.

With some good news on the international dairy market, particularly around the value of milk fat and possibly the settling of Murray Goulburn’s troubles, farmers should have every right to feel more hopeful that next year will see a rise in domestic milk prices.