Gippsland, Vic, milk processor Burra Foods has been the first processor to offer dairy farmers a milk-price step up in 2022.
Burra announced an increase in farmgate milk price 10 cents/kilogram Milk Solids for the full season from July 1, 2021 - June 30, 2022.
Burra opened with a price range of $6.40 - $6.80 kg/MS in May, last year, increasing the figure by 20c/kg MS to a range of $6.60-$7/kg MS, as the battle for milk supply intensified.
Bega Cheese stepped up by 15c/kg MS late last year, applying the price rise from January to June 30.
Burra chief executive Stewart Carson said the company was seeing low market inventories, so there was good demand.
"Most markets are a bit like Australia, they are just dealing with it (coronavirus), just getting on with it," Mr Carson said.
Shipping continued to be an issue, but Burra had good relationships with freight forwarders and shipping lines.
"We are managing it and will continue to manage that as best we can."
He said inventory levels had been run down during shutdowns.
"People would have been consuming some of the stock and suppliers were perhaps not replenishing as much," he said.
"You order for delays in product, it could be two or three months before you get it now, because of the shipping issues.
"You normally hold a couple of months worth of stock in your warehouse, but things have certainly opened up and the replenishment is almost hand-to-mouth."
As an ingredients manufacturer he said he expected demand would remain high for at least the next six months, given the disruptions in global shipping were not likely to be resolved soon.
It did not appear consumers in Burra's markets were reticent to eat out.
"The level of interest has remained high and that's being converted into orders.
"That says to me, they are up and about."
He said south-east Asia and China continued to provide opportunities for Burra.
"Limited global supply growth continues to provide opportunities to leverage the capability of our factory and maximise value from milk solids," he said.
"Our challenge remains navigating through the volatility of global shipping and COVID-19 lockdowns but our long-term partnerships with service providers has helped enormously."
Burra Foods was optimistic about the year ahead, he said.
"Over the past 12 months, we've delivered significant improvements in productivity and quality with targeted business development activities, which are now being commercialised.
"As we realise the benefits of this hard work, I expect to finish the FY22 season well and head into FY23 in a strong position to retain and grow milk supply."
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