Milk price competition heats up

By Dairy News

COMPETITION FOR milk is hotting up with Bega Cheese lifting its opening price only a month after announcing its initial opening.

Saputo has opened at $6.80/kg MS and the company says it won’t be reviewing its prices more than once in three months.

Fonterra, at the time of going to print was on $6.60/kg.

Bega Cheese has lifted its opening price for next season to $6.75/kg, which means that some northern Victorian suppliers could earn more than $7/kg with incentives.

Bega had announced an opening of $6.60/kg at the end of May, but competition for milk supply has pushed the company to go to $6.75/kg, just a month later.

Bega is paying a 20 cent irrigation rebate to northern Victorian suppliers and all suppliers who choose to lock in for three years can earn a loyalty payment equivalent to about 17 cents.

Milk supply has been declining in recent months due to the cost pressures of irrigation water and grain for feed.

Tatura Milk supplier Rob Schloss said the recent 15 cent increase to the opening price, plus the 20 cent payment for supplying milk in the north, brings his opening price to $6.95.

“This gives us a lot of confidence for next season and it’s only an opening price too, it might go higher yet,” Mr Schloss said.

He is planning on milking 300 this spring, but what happens after that will be totally dependent on seasonal conditions.

“There are lots of factors that will come into play, especially around the water job but a price like that does make sourcing feed at the right price more attractive.”

“We need a price like this to encourage people to hang in there, the milk price is one thing, but it is the water job that has everyone worrying.”

Parmalat supplier Terry Malone from Bamawm in Victoria is happy with his opening price of $7.05.

He is hoping with a bit of extra supermarket money from Coles and Woolworths, that price could creep a little higher.

“It all depends on irrigation water and whether or not it rains. Water will be the key to a good year and hopefully there will be cheaper hay and a drop in grain price to make it even better,” Mr Malone said.

The business will be milking about 270 split calving cows this season.

April and Steve Kunde from Mincha are supplying Saputo.

Ms Kunde said they can’t grumble about their $6.80 opening price.

“It’s a better price than we have ever had before so we can’t complain, although of course we would always like more, but everyone has to make a dollar and we all need to survive,” she said.

“If our input costs are lower and water is a decent price we will be fine, water is more of a concern for us than anything at the moment.”

The Kunde family will be milking 180 this season.