Fonterra’s Australian milk intake slump indicates farmers deserted the company


Evidence is emerging of Fonterra Australia suffering a heavy exodus of suppliers this season.

According to the company’s Global Dairy Update released last week, milk collections for the first three months of the new season have reached only 23.2 million kilograms of milk solids, about 6.8mkg MS less than the average for the first quarter of the previous four seasons.

That’s a fall of almost 23 per cent from the average of the past four seasons.

Dairy Australia has forecast 2019-20 national milk production to be 3-5 per cent lower than last season, although Fonterra’s Global Dairy Update report said Australian production was 5.9 per cent lower this August compared with the same month last year.

A Fonterra spokeswoman claimed this season’s milk volume to date was similar to four of the past five seasons. She would not comment on the loss of dairy farmer suppliers.

“This is a drop on when we collected record volumes, however our milk volumes have now stabilised and are at around the same level as four of the last five seasons,” she said.

“We have the milk we need to optimise our factories, service our customers, make a profit and pay a competitive milk price.”

Fonterra’s milk intake for the month of September was 10.7mkg MS, also the lowest in five seasons.

In the Global Dairy Update, Fonterra said milk collection in Australia for the three months ending September 30 was 15.2 per cent lower than the previous corresponding period.

It said the lower figures were due to high farm costs, adverse seasonal conditions and strong competition for milk. It also cited reduced herd numbers as a contributing factor.

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