Bega Cheese has announced a farmgate milk price increase of 14c/kg milk solids for 2018-19.
Bega said the increase amounts to a lift of .09 c/kg butterfat and 0.1 c/kg protein, paid as a loyalty payment from February 1 to June 30.
Bega chairman, Barry Irvin said the current industry conditions were very challenging.
“The prolonged drought in almost all of New South Wales and south east Queensland has impacted all in the industry,’’ Mr Irvin said.
“Significant cost increases in fodder and water, particularly in northern Victoria, combined with dramatic increased costs in electricity have added a great deal of business pressure.
“Overall industry milk production ie estimated to be reduced by as much as 500 million litres in the current year, with northern Victoria estimated to be 1.6 billion litres of milk.
“The result is that competition for milk is fierce with all players keen to secure volume.’’
Mr Irvin noted an improvement in global marketers and a decrease in the relative value of the Australian dollar, which was a positive development.
The industry was also seeing the benefit of decreasing stockpiles in the EU skim milk powder.