Fonterra Australia has announced a milk price increase.
It announced a step up of 7 cents per kilogram of milk solids to bring Fonterra’s average farmgate milk price to $6.05/kg MS.
The increase matches those of Saputo Dairy Australia and Bega Cheese announced late last month.
Bulla has also announced a 10c/kg MS increase.
Fonterra Australia managing director René Dedoncker said the increase would help support its farmers who continued to face challenging conditions.
“There have been some positive signs in global conditions, with recent improvements in Global Dairy Trade prices and the clearing of SMP (skim milk powder) stockpiles in Europe, however, Australian production continues to decline due to drought and high input costs.
"This is leading to increased competition across our dairy regions, particularly in northern Victoria.
“Rising costs for feed and water continue to be a challenge for our farmers, and we hope this price increase helps to ease some of the pressure for the remainder of the season.
“We will continue to monitor currency and global dairy prices and keep our farmers updated throughout the season.”
Related reading Global dairy prices surge Milk production plummets Bega and Saputo step up
Global dairy prices surged on Wednesday night with the Global Dairy Trade auction recording its biggest jump in more than two years.
The GDT price index lifted 6.7 per cent, the biggest increase since November 2016.
The lift was the fifth consecutive rise with the $US3265-a-tonne average price back to the same level as June last year before prices began a slow descent.