First Milk is to freeze its farmgate milk price for December following four consecutive months of increases.
The dairy co-op said the price it paid farmers across its four geographical milk fields would remain between 29.09ppl and 30.57ppl next month, in the face of a softening in dairy commodity markets.
“This year, we have been able to return significant increases in milk price as a result of market conditions and ongoing improvements in our business performance,” said First Milk farmer director and vice chairman Jim Baird.
“World dairy commodity markets have stabilised and so the outlook for future market performance has started to soften. Our continued focus remains on driving efficiency and quality through our operations, building on our strong, long-term relationships to deliver competitive total returns to our members.”
The move comes after a sustained period of tight supply in the global dairy market, with commodities such as butter hitting record prices in recent months.
However, some commentators have suggested this period could now be coming to an end, with the results of Fonterra’s most recent Global Dairy Trade auction on 7 November down 3.5% on the previous fortnight as a result of increasing supply and dampened demand for dairy products in markets such as Asia.