Australian dairy farmers today have a clearer picture of the prices they will receive for milk production over the coming season.
- The prices paid by processors to Australian dairy farmers change each financial year
- Recently introduced regulations stipulate processors must announce prices by 2pm on June 1
- This year’s prices are slightly higher than last year’s
Today is World Milk Day and also the day that Australian processors are obliged to announce their prices for the financial year ahead.
Farmers and processors in the sector now operate under the Dairy Code of Conduct, which sets out the rules of engagement between the two parties.
The development of the code was initiated after the events of 2016 when major processors retrospectively cut the prices they paid to farmers mid-season.
Now, processors have a deadline of 2:00pm on June 1 each year to publish the minimum prices they will offer to farmers for the coming milk supply season.
The latest prices reflect an increase of roughly 30 to 50 cents per kilogram milk solids from last year.
Global Dairy Trade is just one of many indicators of the performance of dairy markets. Two trading sessions are held each month on the online platform.
The GDT average price index has risen from $902 on May 19, 2020 to $1,287 on May 18 this year.
Code compliance an ACCC priority
The Dairy Code of Conduct was a key recommendation of a 2018 inquiry into the dairy industry conducted by the Australian Competition and Consumer Commission (ACCC).
It said the publishing deadline allowed farmers to compare processors’ minimum prices and contract terms.
ACCC deputy chair Mick Keogh said the organisation would keep a close eye on processors’ compliance with the code this year.
“As well as checking the compliance of milk supply agreements and dispute reports immediately after the June 1 publishing deadline, we’ll be conducting risk-based audits throughout the year,” Mr Keogh said.
“(This) includes randomly selected traders and those with a history of complaints made against them. These audits can occur at any time during the year.”