More dairy step ups as battle intensifies

More dairy opening price step ups announced as battle for supply intensifies


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GAME ON: Milk processors in southern Australia are competing aggressively to hold supply.

GAME ON: Milk processors in southern Australia are competing aggressively to hold supply.

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The battle for milk supply in southern Australia is intensifying with Fonterra and Bega announcing step ups this week to try to hold supply.

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The battle for milk supply in southern Australia is intensifying with Fonterra and Bega announcing step ups this week to try to hold supply.

In unprecedented action, a number of processors after announcing opening prices earlier than usual have stepped up before the season has even begun.

Fonterra announced on Friday a step up of 20 cents a kilogram milk solids to bring its opening price to $6.80/kg MS.

This was mid way through a series of supplier meetings in northern Victoria with Fonterra Australia managing director René Dedoncker and Fonterra general manager - milk supply Australia Matt Watt.

The company also announced a step-up in its 2018-19 price to $6.15/kg MS.

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Bega Cheese lifted its opening price on Tuesday to $6.75/kg MS, after announcing a $6.60/kg MS price in May.

The battle for milk supply, in the wake of a big fall in production and an improved global outlook, has prompted dairy processors in southern Australia to offer record opening prices.

In early June, Saputo announced a $6.80 a kilogram milk solids price, 18.3 per cent higher than its opening price last year of $5.75/kg MS.

The company also announced a step up for season 2018-19, taking the closing price to $6.15/kg MS.

Some of the smaller processors have been even more aggressive in their pricing.

Australian Consolidated Milk threw down the challenge to other processors, announcing a record $7/kg MS price, after the major processors had announced.

The company said the price was a guaranteed minimum for the season, and replaced the guaranteed minimum price of $6.50 for 2019/20 it announced in February.

Bulla Dairy Foods, which initially announced a $7/kg MS price, increased that to $7.20/kg MS in early June. This season is the second in which Bulla has sourced milk directly.

This story first appeared on Australian Dairyfarmer

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