UPDATE: FONTERRA Australia and Burra Foods have announced step ups for suppliers.
Fonterra is increasing its prices for Victorian and Tasmanian suppliers by eight cent per kilogram fat and 20c/kg of protein, a company statement said.
The price increase brings the average weighted about $5.10kg/MS.
Fonterra milk supply general manager Heather Stacy said demand for products was high and the company was passing on the benefits to suppliers.
"We are experiencing strong demand from our bulk ingredient and export customers, particularly across high value product categories such as nutritional powders," Ms Stacy said.
"Dairy commodity prices have remained firm over the past couple of months – well above the US$3000 per tonne mark – and we are pleased to have made the most of this for the benefit of our farmer supplies."The price increase will be backdated to July 1, 2011.
"The outlook for the remainder of this season is good and we see further upside still to come which bodes well for a strong finish to the season. At this point in time, we expect to close well within Dairy Australia's forecast final price range of $5.10 to $5.50 per kilogram of milk solids," she said.
Burra Foods this morning announced a further a ten cent a kilogram fat and 25c/kg protein price rise.
The company said the rise equated to an increase of 17c/kg of milk solids and lifted the average annual price to more than $5.05kg/MS.
"We should all be concerned over the economic issues in Europe and ask what they may mean for our businesses however I can't see a meaningful impact on global dairy prices the short- and medium-term hence our outlook remains positive," Burra Foods chief executive Grant Crothers said.
"Our key exports markets, including Japan, South East Asia and the Middle East are performing well and reflect firm demand," he said.
