The Australian dairy industry has praised the launch of the highly anticipated Milk Price Index, which is aimed at helping farmers interpret and better understand commodity market price signals so they can make more informed business decisions.

“The Milk Price Index is intended to be one tool amongst a range of data sources that will help farmers better forecast and plan for the future,” United Dairyfarmers of Victoria President Adam Jenkins said on Monday.

“(It) will help farmers focus on the trends of the world market and how that aligns with the Farmgate Milk Price.”

“The index will also allow farmers to track commodity prices received by Australian dairy processors.”

Launched by the Federal Agriculture and Water Resources Minister David Littleproud last week, the index will include a one-year forecast for prices that will be updated each quarter, along with regular global, national and regional information.

“Once farmers begin providing prices via an online form, an index of actual prices received in each of the eight dairy regions will be built,” Littleproud explained.

“The more dairy farmers take part, the better this index will be.”

In the past, Aussie farmers have largely been in the dark when it comes to deciding on prices and many in the industry have been calling for a price mechanism for a number of years.

“Better price transparency and market signals for farmers is a good thing,” Littleproud said.

“Farmers will be able to see an index of commodity prices received by Australian dairy processors for cheese, butter, skim milk powder and whole milk powder exports.”

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