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Milk price hopes rise

ANTICIPATION is building in the dairy industry, as farmers expect opening season milk prices to be unveiled soon.
Burra Foods and Fonterra Australia have declared they will announce their opening prices shortly.
Burra Foods, of Korumburra, yesterday (Monday) announced it is offering farmers the chance to lock in a percentage of their milk at a flat $6/kg milk solids farmgate price for the next three years.
Grant Crothers, Burra Foods chief executive officer, said, “The last 10 years has seen a significant increase in the volatility of dairy markets and the farmgate price, making dairying enterprises harder to manage.
“Locking in a percentage of milk production at a fixed price of $6/kg MS provides income stability and a hedge against future volatility on a pre-determined portion of milk.”
Participation is by application and farmers are to nominate the portion of milk solids they would like to ‘lock in’ during the three years, from July 1, 2018. Applications close on June 15.
Analysts are predicting a farmgate price as low as $5.50 and as high as $6.20 for the 2018-19 financial year.
“Headline prices quoted by the media are often unachievable on a typical Gippsland supply curve,” Mr Crothers said.
Burra Foods also announced an earlier payment of the Burra Supply Incentive as a result of continuing unfavorable seasonal conditions and increased cash flow pressure on dairy farmers.
Fonterra Australia has announced a forecast closing farmgate milk price range of $5.50 to $6.20 a kilogram of milk solids for the 2018-19 season.
Managing director René Dedoncker said, “We’re building long term relationships with strategic partners, and with cheese markets like China and Japan, to tap into growing domestic and global demand, which is providing more opportunities to grow the value of our farmers’ milk.
“At the same time, we continue to make efficiency improvements that mean we have the right asset base to play to our strengths in cheese, whey and nutritionals.
“We are confident our strategy will enable us to continue to pay a competitive price next season. We expect seasonal growth from our existing farmers to continue next season which will meet our customer demand.
“We will announce our opening price in the coming weeks.”

Short URL: http://thestar.com.au/?p=25105

Posted by on Jun 5 2018. Filed under Rural News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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