Milk recruit pursuit as dairy processors try to sign up suppliers

Major company, Saputo, and organic company, True Organic, have taken out full-page advertisements in The Weekly Times to attract suppliers. This comes as dairy farmers are waiting to hear an opening price from the nation’s largest milk processor, Saputo, before committing to move their supply.

Burra Foods released an opening range of $5.60-$5.90 a kilogram of milk solids last week, including the annualised portion of the commitment bonus offered last July of about 13 cents/kgMS. Burra also become the first processor to offer suppliers the chance to receive equal payment for butterfat and protein next season. Traditionally protein was worth more than double that of fat.

The opening range has met mixed reaction, as farmers told The Weekly Times that with the incentive removed Burra would open next season where it closes this season.

Burra chief executive and managing director Grant Crothers said the opening range reflected the market, and the inclusion of the incentive allowed the price to show what would be received by those who elected to receive the cashflow incentive. He said not all farmers chose to receive this incentive, but “we have got to cater for the whole supply group”.

Fonterra, Australia’s second largest milk processor, hasn’t released an opening price yet, but last month released a closing range of 70 cents a kilogram of milk solids which suppliers criticised as vague.

The Weekly Times understands South Australian processor Beston Global Foods will expand its hunt for milk across into Western Victoria — something it foreshadowed last year — adding to the competition heating-up in the region.

United Dairyfarmers of Victoria president Adam Jenkins said it wasn’t acceptable that some dairy processors hadn’t released opening prices yet.

“If they don’t know their opening price, they shouldn’t be in business in Australia if they cannot forecast three months out … we (farmers) have to do it all the time.”

Mr Jenkins welcomed Burra’s change to fat pricing, but wasn’t as pleased abut the incentive. “It is good to get the cashflow upfront (incentive payment) but it needs to be separate from farmgate milk price,” he said. “

Jersey Australia president Chris MacKenzie congratulated Burra, saying it was providing fairer return for their milk.


Source: The Weekly Times


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