12 Feb 2010 --- Fonterra has announced a price increase of 20 cents per kilogram (c/kg) of milk solids (i.e. 12c/kg butterfat and 30c/kg of protein) for dairy farmers who supply its manufacturing sites in Victoria and Tasmania.

“This increase reflect conditions on global commodity markets, where despite some recent softening in demand, prices continue to be above the US$3,000 per tonne mark,” said Heather Stacy, Fonterra National Milk Services Manager.

“We have also seen some modest improvement in the currency situation, although the Australian dollar continues to be relatively strong.

“This milk price increase applies across-the-board to all current Victorian and Tasmanian suppliers and will be backdated to 1 July 2009. Our average annual price is now $4.26 per kg of milk solids,” said Ms Stacy.

“Fonterra’s farmgate price has increased by around 18 per cent since the start of the season, which equates to an additional $74 million put in the pockets of our 1,300 dairy farmer suppliers.

“Fonterra’s four consecutive step-ups help deliver on our commitment to re-instil confidence in the manufacturing milk price system after the unprecedented volatility of last year.

“We remain determined to reflect any further significant improvement in market conditions in our farmgate prices,” said Ms Stacy.