Milk circus time

Conversations | 4th June 2024 | By Chris Lawlor

Independent Contributor

Ladies & Gentlemen…..allow me to introduce tonight’s act…..the opening Milk Price.

In the arena we have…..

The Elephant – Fonterra (the elephant in the room because we don’t know how long he’s gonna be in the room) with a conservative $8.00, which mirrors the NZ opening price.

Local favourite the Kangaroo – Bega (Home grown and owned, will big shareholder Twiggy bounce on the brands Elephant borrowed for 25 years?)…..opening at $8.05

The Grizzly Bear – Canadian owned Saputo (Grizzly because the Elephants been dumping cheap kiwi product in his patch)…..but not so grizzly at $8.07

Whilst not looking like the frenzy of the last two years happening (perhaps agreeing to ‘claw back’ some of last year’s losses) processors can continue to adjust their pricing but only up, not down….the smaller players may have an influence:

  • Can Beston Foods recover or will they get swallowed up….$7.90
  • ACM at $8.00…..UDC at $8.10…..ADFC at $8.20…..Burra at $8.25…..Bulla $8.30…..Cadbury $8.35
  • Is 20-30c enough for farmers to jump?
  • Lactalis $8.25 – $8.40 recently reduced capacity closing the Echuca facility.
  • Has Coles purchasing the Fresh Milk off Saputo influenced competition?

GDT has done a nice little kangaroo hop and as shown in the NZX spot price milk calculator based off the last GDT the NZ spot price is $9.48. This gives the most transparent reflection of current international pricing, although WMP and butter may be inflated with low seasonal supply.


Now last season the kiwis expect to be paid $7.80/kgMS or circa 20% less than the Australian average, so to have spot price circa 20% above is interesting to say the least. There is an exchange rate factor to consider here, but what it does show is that as long as the processor has the ability to dry excess milk they can make a $9 plus equivalent exporting now.

This time last year Fonterra opened with $8.65 rising to $9.20 jostling with Saputo and Bega for most of June. With an impending sale it’s unlikely Fonterra will be as competitive as in the last 2 years but will surely follow if there are any rises to protect supply and ultimately business value. Saputo has rationalised too with plant closures, as well as selling the fresh milk business to Coles.

With under 10c separating the Big 3 this may be a quiet month……Generally farmers wouldn’t change processors for 10c, circa 20c or more they will.


  • Dairy
  • Prices
  • Processing