The price comes after Australian Dairy Farmers Corporation last Friday informed Bulla Dairy Foods suppliers of opening prices varying from $5.45 a kilogram of milk solids to $5.90kg/MS — with the “average” at $5.74kg/MS.
The weighted average for its Procal Dairies suppliers is $5.93kg/MS.
New player the Union Dairy Company at Penola in South Australia opened at $5.50kg/MS last Tuesday.
It is offering 25 cents a kilogram as an incentive to sign up for a year, with a further 25c/kgMS available for the second year if a farmer signs up now for two years.
ADFC has introduced payment bands for Bulla suppliers that reflect how much milk a supplier produces out of season.
The highest opening price of $5.90kg/MS is for those who supply more than 44 per cent of milk, the opening price of $5.70kg/MS is for those who supply 39-44 per cent of their milk at this time and the 5.45kg/MS is for suppliers achieving less than 39 per cent of their milk at this time.
Full year forecast prices for these bands varied from $5.95-$6.20 for those with the highest opening to $5.50-$5.75kg/MS for those with the lowest opening.
ADFC chairman Scott Sieben said, in a letter to Bulla suppliers, they will pay a “flat all year round base milk price” with the reference solids (what price is based on) at 4 per cent butterfat and 3.2 per cent protein.
Last week UDC managing director Daniel Aarons debunked rumours that the plant, which would begin taking milk from the start of next month, was fully supplied.
Mr Aarons said half the 25c kg/MS bonus will be paid upfront and the other half at the end of the season, the equivalent of a payment of about $10,000 for every one million litres of production forecast.
Mr Aarons said the UDC would be making “reasonable forecasts” for the production of individual farms and it was “not the intention” to make farmers pay back money if they fell short.
By: SIMONE SMITH
Source: The Weekly Times
Link: http://www.weeklytimesnow.com.au/agribusiness/dairy/farmgate-milk-price-processors-offer-incentives/news-story/dac43ec787954df3c25ca2eb9f861ced