Dairy prices rise
DAIRY farmers continue to enjoy a bright outlook, with two dairy companies announcing price rises in the past week.
Murray Goulburn suppliers will receive a price increase of $0.25/kg protein and $0.10/kg butterfat for milk supplied across the 2010-11 season.
Burra Foods announced a step-up of $0.12/kg fat and $0.30/kg protein.
The rises come as grain prices increase and farmers hope for continued rain to boost pasture growth for harvest. In a statement to suppliers, MG managing director Stephen O’Rourke said the rise takes the average weighted farmgate price to about $4.92 per kilogram of milk solids, up from the $4.75 opening price.
He said the co-operative’s forecast final milk price had been maintained at a range of $5.30 to $5.50 per kilogram of milk solids.
Stony Creek dairy farmer Peter Hanrahan was pleased with the step-up. It gives him confidence about producing high levels of milk through summer.
“Murray Goulburn said there would be a step-up coming and we knew things were looking positive despite the high dollar,” he said.
“We’re still recovering from a tough 18 months. The step-up will help us to plan better for silage, and also the grain and hay harvests are about to take place up north.”
South Gippsland VFF/UDV president Max Jelbart said the Murray Goulburn step-up had been foreshadowed earlier in the year.
“The seasonal conditions and grain prices mean the step up is very welcome among farmers,” he said.
“The high dollar has certainly put some pressure on milk prices.”
Mr O’Rourke said world market prices had held reasonably firm during the first quarter of the season and the expectation is that the market should continue to remain solid. “However the major area for concern is the strengthening Australia dollar which some economists suggest may continue to appreciate through $1.10 while others say it is overvalued,” he said.
MG’s milk intake has suffered during September and October due to extremely wet conditions.
But they anticipate production improving as the year progresses.
Mr O’Rourke said the relatively wet winter and early spring had led to a very strong spring growth and a very positive outlook for the harvesting of fodder.
”Dairy farmers are now harvesting silage and hay, and with replenished water catchments the outlook for feed inputs in the medium term is relatively good for dairy farmers,” he said.
Burra Foods chief executive officer Grant Crothers said the company is remaining vigilant, with the high Australian dollar depressing returns.
“However global supply and demand of dairy commodities is currently well balanced and this has resulted in some stability in the market in recent weeks,” he said.
This equates to an increase of 20 c/kg of milk solids and takes Burra Foods’ average annual price to $4.95 c/kg per kg of milk solids.
Fonterra has a bi-monthly pricing review structure in place for their farmers this season.
Fonterra will next review prices later this month.
Fonterra expects further improvement in farmgate prices this season.
Short URL: http://www.thestar.com.au/?p=322