There is a frenzy of activity across Queensland as all milk processors try to secure milk for July 1. Every processor across Australia is desperately short of milk and scrambling to secure any milk they can.
Prices have been moving up gradually over the past month. It started with a small increase of 5c/litre, then 9, followed by 11, 12 and now 13c/L increase. On average, Lactalis appears to be leading the way now with a price of around 85c/L. Norco appears to be around 1c/L behind and Bega around 2c/L behind in south east Queensland. Surprisingly to most, Maleny Dairy and Farmers Owned appear to behind all three major processors when historically they have been above.
So what will happen next? I would expect to see significant increases from processors over the next few weeks leading up to July 1. It is likely that the price will get to 90c/L. Why? Because it costs at least 90c/L, probably more like 95c/L, to buy milk in Victoria and transport it to Queensland. So if the market works and competition drives the price as it should then the price should be at least 90c/L.
So what can farmers do to drive competition and push the price up to where it should be? If you are coming off contract in the next year speak to every processor who may be interested in buying your milk.
There are a lot of farmers very active in speaking to multiple processors. Some of those farmers would be considered extremely loyal and untouchable by other processors. But no one should be untouchable. Any farmers who are loyal and do not speak to all processors and just expect to get a price rise get what they deserve and that is to be exploited.
For dairy farmers the market is finally working and massively in your favour. Get on the phone and speak to all processors, myself and anyone else who can help you put the price up to a level that you deserve and makes your farming operation profitable.
