Last month, their opening gambit had been a “weighted average farm gate milk price for non-exclusive supply of $8.50 per kilogram milk solids”, still significantly ahead of the 2021-22 opening of $6.55kg.
The increase follows similar moves by other manufacturers operating in the South Gippsland supply zone, including Burra Foods which revised its May opening to a range between $8.50 and $8.90/kg MS
Saputo Dairy Australia advised its suppliers of the new price on Saturday, June 11.
“This is an increase of 21 cents per kilogram of butterfat and 42 cents per kilogram of protein. Our exclusive minimum milk price has been increased by the same rates,” said Saputo in its statement.
“Our revised opening minimum milk prices are reflected in the Milk Supply Agreements published on our website.
“The non-exclusive minimum price is the price we will pay monthly to suppliers for nonexclusive supply of premium quality milk in each of the Northern Region, South-West Victoria and South Australia region, Gippsland region and Tasmania (including King Island).
“Exclusive milk supply agreements are available to suppliers in our Northern Region and South-West Victoria and South Australia region.”
During the week, Burra Foods CEO Stewart Carson addressed the question about how milk companies could suddenly find more money for a revised opening, saying a month was a long time in the dairy industry, during which costs were better understood and product contracts finalised.
Mr Carson said Burra held its supplier meetings in May, where it announced its opening price, because it wanted to give suppliers a good idea where Burra was at coming into the new season.
They announced an opening milk price range of $8.20-$8.60/kg MS for the 2022-23 season in May and then revised that figure up by another 30 cents to between $8.50 and $8.90/kg MS this week.
“Yesterday we increased that by another 30 cents, so we’re now $8.50 to $8.90. We always publish a range because we know that over 90% of our milk supply partners will land in that range. We don’t like the concept of a headline price where a lot of people can’t reach that price. So, we’re really confident with that and we know that price range really suits our Gippsland supply base and we’re very comfortable that over 90% of our supply partners will be in that range,” Mr Carson said.
He said the manufacturers were working in a climate of rising input costs and he appreciated that the firm’s suppliers were in the same boat.