Saputo announces step up

11 May, 2018 01:39 PM
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Saputo has announced a step up for its suppliers, including former Murray Goulburn suppliers.
Saputo said it was focused on building milk supply in Victoria and Tasmania as a priority.
Saputo has announced a step up for its suppliers, including former Murray Goulburn suppliers.

Saputo Australia has announced a step up for its southern milk region and NSW suppliers.

This takes the average farmgate milk price for the 2017/18 season for all Saputo Dairy Australia suppliers in the southern milk region to $5.68 per kilogram milk solids (up from $5.60/kg MS).

The step up comprised 5 cents/kg butterfat and 11c/kg protein.

The payment is retrospective and applies to milk supplied by active Warrnambool Cheese and Butter and MG suppliers from July 1.

Saputo said it was focused on building milk supply in Victoria and Tasmania as a priority.

Fonterra announces fixed base milk price

Meanwhile, Fonterra has announced the results of its fixed base milk price tender.

The fixed base milk price for the 2018/19 season will be $5.90 per kilogram of milk solids (kg/MS).

Fixed base milk price is a price risk-management tool that lets farmers lock in a set price for up to 70 per cent of the season’s milk before the season starts, providing greater price certainty by helping to reduce farmers’ exposure to market volatility.

Now in its fifth year, interest in the initiative continues to grow from both farmers who take up the opportunity each season, as well as new participants.

Fonterra Australia’s general manager farm source, Matt Watt, said that the strong interest showed farmers were looking for greater price certainty to help them better plan.

“Certainty can be particularly important for farmers at times when they are considering business investments such as expansion or undertaking a new conversion," he said.

“Fixed base milk price is a bit like having a fixed interest rate on your mortgage versus a floating rate. It enables you to know exactly where you stand with a percentage of your production and this can help with future planning and the ability to manage margins."

To determine the volumes and prices of milk solids under fixed base milk price, Fonterra used a tender allocation process whereby farmer suppliers offered certain volumes of milk solids at a set price, which Fonterra then worked to match to customer demand.

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