Australian Consolidated Milk organic suppliers will receive an opening guaranteed price of $9/kg MS next season, a lift of 12.5 per cent on this year’s opening price.
Announced last week, the price includes nine months of $9.40/kg MS and three spring months — September, October and November — at $8.20/kg MS.
The opening price, which will come into effect for the new season starting July 1, is 10¢/kg MS more than this year’s closing price and comes as ACM’s organic milk pool has increased by 25 per cent.
‘‘The new season’s price reflects ACM’s continued progress in developing the organic business,’’ ACM commercial manager Peter Jones said.
‘‘With stage one of the Girgarre site complete, producing organic milk powders and organic butter, we have commenced stage two of the project, building cheese manufacturing on the same site.’’
Mr Jones said the organic business continued to grow.
‘‘With our own speciality factory at Girgarre and long-term agreements with businesses such as Bellamy’s Organic we are now better-placed then ever to take advantage of this growing appetite for organic products.’’
He said the nine-and-three payment system would simplify milk payments and could help to reduce on-farm milk production costs without damaging suppliers’ milk incomes.
‘‘This change was something suppliers asked for and because we have a great mix of products and Girgarre is set up to manage specialty milks, we can deliver this,’’ Mr Jones said.
ACM has also changed the value weighting of protein and butterfat, bringing the ratio from 2.2:1 in favour of protein, to 1:1.
‘‘This will take the pressure off our organic suppliers and will simplify even further our price payment system,’’ Mr Jones said.
Although the increased pricing has been welcomed by organic suppliers, Mr Jones said the company recognised the current cost of production had ‘‘cruelled’’ all dairy farmers.
‘‘We are watching the weather daily and really hoping that the recent rainfall is the start of the change in luck for our suppliers and a return to profitability.’’
Mr Jones said ACM would support farmers interested in converting their businesses from conventional to organic milk production.