Bega Cheese extends 2017-18 farmgate milk price

The milk processor’s current price is $5.63 cents a kilogram of milk solids.

The extraordinary move was designed to give Bega Cheese suppliers “price stability for the commencement of the 2018-19 season”, according to a letter sent to suppliers.

“This means we will be paying the same pricing for July/August/Sept 2018 as we did in the same months of 2017,” the letter said.

The company said it would announce milk payments for October onwards before September.

Bega Cheese was also offering a once-off 50 cents a kilogram milk solids payment if suppliers agree to a three-year milk supply agreement, and 25 cents a kilogram of milk solids for a two-year arrangement.

Dairy consultant John Mulvany welcomed the early indication of the farmgate milk price for next season, particularly after some dairy analysts were suggesting low opening prices for 2018-19.

“It’s really good to have an indicative early price, even for part of next year,” Mr Mulvany said.

He said some farmgate milk price forecasts circulating in the industry “had an absolutely dispiriting effect” on dairy farmers.

“So the Bega announcement has countered some of that.

“My interpretation of next season’s milk price is that it doesn’t look too bad from where world markets are.

“The Bega forward price, which is a conservative position, is where I would consider milk prices to be heading, based on where the world price is.”

Mr Mulvany also supports the concept of a loyalty payment.

“I don’t have a problem locking into a relationship with a processor,” he said.

“Somehow, we have got to stop this cultural practice of factory hopping.

“It’s not good for anyone.

“It’s a complete distraction and creates uncertainty.”

Mr Mulvany said the only downside to the upfront payments offered by Bega was that the company was paying for milk not yet produced.

He said the forward payment was designed to help farmers with their cash flow.

“I wonder how much payment into the future we can do before we reach a point where we are not helping people,” he said.

“Dairy companies are then actually becoming the bank.

“We saw one big processor become the bank in the past few years and will no longer exist soon.”

By: PETER HEMPHILL

Source: The Weekly Times

Link: https://www.weeklytimesnow.com.au/agribusiness/dairy/bega-cheese-extends-201718-farmgate-milk-price/news-story/b1bfcc3422c2633f11e0facf9c90abe9

Any claim arising from the information contained on the eDairy News website shall be submitted to the competence of the ordinary courts of the First Judicial District of the Province of Cordoba (Primera Circunscripción Judicial de la Provincia de Cordoba), Republic of Argentina, in the city of Córdoba, excluding any other jurisdiction (Federal jurisdiction is also excluded).

*

Criteria in the moderation of comments that eDairy News will take into consideration in all its publications.

  • They will not be considered insults of any kind against anyone,, whether a user, moderator or publisher. Complaints made with the name and surname of the author of the commentary will only be accepted after confirmation by the moderator.
  • Unsubstantiated and gratuitous destructive criticism or expressions of bad taste, whether offensive, racist or xenophobic.
  • SPAM, (Insert links to web pages not related to the subject, provide emails, etc...)
  • Comments that are meaningless with the footnote or the dairy sector.

Related posts


Top