Murray Goulburn: Co-operative eyes New Zealand payment plans

MURRAY Goulburn is considering a conservative New Zealand-style payment system as part of a review flagged at its annual general meeting last week. By SIMONE SMITH.
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MG chairman Philip Tracy said a review was needed because MG had had two step-downs in the past eight years, compared with three in the co-operative’s 66-year history.
He said market volatility played a role in the step-downs because of the co-operative’s reliance on global markets and pointed to payments systems in other countries as guides to what Murray Goulburn would consider as part of its review.
“Murray Goulburn typically announces a forecast full-year final milk price and then pays 90-92 per cent of the final price as the opening milk price,” he said.
“This approach supports supplier cash flows and responds to the intense competition for milk in the Australian market, which motivates processors to pay the highest possible opening price.
“This mechanism has proved problematic twice in the past eight years. In New Zealand the opening price is traditionally a lower percentage — between 60 and 70 per cent of the forecast final farmgate milk price.”
New Zealand Federated Farmers dairy industry group chairman Andrew Hoggard said NZ farmers were generally happy with the way they were paid, but there were now more options and more farmers were moving to lock prices in with futures contracts.
He said Fonterra suppliers traditionally received “quite a bit of cash in October”, as they were paid for 12 months’ worth of milk across 16 months, but if prices were cut throughout the year, therecould be a cashflow shortage in winter.
“Spring is always a tight time, but the only real time when we (have had cash-flow concerns) was last winter, when we didn’t get any retrospective payments,” he said.
“They started the milk price assuming it would end up much better than it did. The advanced rate position was high, and they had to peg it back a little bit and there was no room for (retrospective) payments in winter and spring and it was the first time we received a statement from Fonterra with a big zero on it.”
Mr Hoggard said Open Country Dairy, New Zealand’s second-largest processor, allowed dairy farmers to lock in a price for three-month blocks that was then reassessed.
Rabobank New Zealand dairy analyst Emma Higgins said there had been “minimum or no” retrospective payments for Fonterra suppliers in the past two seasons, but the flipside of this was there were more in better seasons.
“It opens at about the 60 per cent mark (of final price) — this depends on each season — and it progresses in increments to 80 per cent and at the end of the season there’s about 20 per cent allocated for retrospective top-up payments,” she said.
Murray Goulburn announced a step-up of 26c/kg of milk solids last week, to $4.86/kg/MS, with half paid at the end of the season as a loyalty bonus.
The same day Fonterra Australia lifted its price by 22c/kg of butterfat and 55c/kg of protein to $5.10/kg/MS.
Source: WeeklyTimes
Link: http://www.weeklytimesnow.com.au/agribusiness/dairy/murray-goulburn-cooperative-eyes-new-zealand-payment-plans/news-story/faf3507d06160405df9fb64b12118c3a

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Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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