One of WA’s major dairies is keeping base milk prices steady for the 2024-25 season in a bid to keep production flowing.
Brownes Dairy has announced the move which it expects will help to provide security to its local producers, despite a drop in farmgate milk prices nationally, broader economic uncertainty and a dry summer in the State’s south-west — the engine room of dairy production — proving challenging.
“WA farmers need to be incentivised to keep producing the high-quality, fresh milk that West Australian families have come to expect from Brownes Dairy,” chief executive Natalie Sarich-Dayton said.
“Our focus remains on securing growth in milk production within our State and ensuring our industry remains vibrant and prosperous.”
Brownes, Australia’s oldest dairy, collects about 140 million litres of milk each year from 50 farms across the south west.
The move comes as major east coast producers slash farmgate prices to farmers and producers, including Fonterra, Saputo and Bega, which operates the Masters range, and concerns continue about the sector more broadly.
Ms Sarich-Dayton also announced the launch of new incentives for its farmers to map and understand carbon emissions, while Brownes will also launch a program encouraging farmers to examine their renewable energy options, and their usage.
“We are proud to have already mapped over 80 per cent of our on-farm carbon emissions and aim for 100 per cent in the near future,” she said, adding Brownes was the first Australian processor to offer financial incentives for farmers to measure and share their carbon emissions.
“By providing stable pricing and robust sustainability initiatives, Brownes Dairy strives to ensure a thriving dairy industry in WA.”
The new sustainability program includes financial support for the cost of energy audits, which Brownes expects will allow farmers to make informed decisions about renewable energy options and their energy usage overall.
Nationally, dairy farmers are “within reach” of overall profitability for the fifth consecutive year, according to analysts at Rabobank, despite the drop in farmgate prices in eastern States.
Dairy companies were “walking a tightrope” and had to send strong price signals to suppliers and navigate softer market returns, senior dairy analyst Michael Harvey said.
“In a market short of milk – and with an ambition to build momentum around the current milk supply recovery in Australia – dairy companies need to present sustainable milk price signals to suppliers in order to remain competitive,” Mr Harvey said in a report late last month.
“Meanwhile, the domestic market is delivering better returns for dairy following a period of hyperinflation across the grocery aisle, but consumers choosing to trade down as a result of cost-of-living pressures is negatively impacting the domestic retail channels.”