He told farmers at Warrnambool to bank on $5.80 a kilogram of milksolids next season.
That was down from forecast Victorian closing prices of $6/kg MS or more this season but more than current farmgate price of $5.60/kg MS.
Gorey said unlike the New Zealand farmgate milk price, which crashed to a low of NZ$3.85/kg MS this season, Australian prices had been relatively stable in recent years.
His forecast 2016-17 Australian price reflected the global dairy price crash “moving through” the Australian market.
“Our price never goes up as much but doesn’t fall as much,” he said.
“It is much smoother.”
Tobin said the Australian dollar was expected to drop to US65c early next year before rising again mid-year.
He was confident global dairy markets had hit the bottom, with recent price rises in the online GlobalDairyTrade auction and NZX Futures giving positive signs.
“The gloom we talk about is in the rear view mirror now,” he said.
“What we don’t see going forward is a shift back up to the really, really high price position.”
ASB rural economist Nathan Penny said NZ dairy farmer confidence was “rubbish”.
Even if Fonterra lifted its farmgate price forecast “many farmers were still a long way off making money”.
NZ production was expected to be 5% down on last year, the largest year-on-year fall since 1999, according to Penny.
That was off the back of huge cull numbers, poor pasture growth and less imported feed.
Penny said NZ dairy farmers had culled nearly 900,000 cows this year and many were expected to cull again following peak milk production in spring.
That meant NZ was likely to fill its US beef export quota for the first time since 2004.
NZ dairy farmers were not worried about the higher price Fonterra was paying its Australian suppliers, he said.
Rather, they were concerned about the profitability of the business.
“What they are worried about more is the Fonterra business globally,” he said.
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