SAPUTO HAS announced milk price step-ups for its suppliers in southern Australia and NSW.
The Canadian processor late last month lifted its opening price of $5.75 kg milk solids(MS) by 20¢/kg MS to $5.95 kg. The price rise sees step-ups of 14¢/kg for butterfat and 28¢/kg for protein.
NSW suppliers will see a price rise of 28 cents a kilogram for butterfat and 42¢/kg protein, taking the price to 52 cents/litre, up from 49.6¢/litre.
Western Victoria farmer Leighton Hart, Deans Marsh, said the southern Australia price rise “brings most of us up to opening price” — a reference to the ‘weighted average’ headline price processors use, but which are paid to well less than the average number of dairy farmers.
“It’s better than nothing. A much needed cash injection,” he said.
The increase will be paid retrospectively from July 1 and paid with September 2018 proceeds during October. Saputo has said it will review its milk price quarterly, in October, January, April and June, but made the announcement early.
Saputo chief operating officer, Kai Bockmann, said the increase reflects the positive impact of a weaker Australian dollar, despite a decline across all dairy commodities in recent months.
“It is not connected to recent developments in relation to the dairy levy proposed by the (Federal) Agriculture Minister, although we hope the increased price will provide some assistance to those impacted by continued drought conditions and higher feed and water costs.”
Mr Bockmann said the company acknowledged the challenges caused by the current conditions.
Northern NSW-based co-op, Norco, will lift the price paid to its farmers by five cents a litre.
Norco has more than 200 suppliers in northern NSW and southern Queensland.
Chairman and acting CEO, Greg McNamara, told ABC Radio the move would cost Norco an estimated $900 000 a month.
While the increase is initially for milk supplied for this month and October, Mr McNamara the intention was to extend it.
"The business is performing quite well so we’ve taken the opportunity to put a five cents a litre base price increase on all litres of milk made from September through to October with the intention of trying to take that further," he said.
"The fact that farmers need an uplift in price now not in six months’ time to cope with the current dry conditions especially on the Darling Downs in south-east Queensland where 30 to 40 per cent of our supply is."
Meanwhile, Bega has announced it will trial a simplified milk system in south west Victoria, with the potential to extend it to other suppliers.
The payment structure would comprise one price for nine months and a second price for spring.
The purchase of Murray Goulburn’s former factory in Koroit enabled them to trial the incentive, Bega executive chairman Barry Irvin said.