Supply shortages drive milk price record

LEONGATHA based milk processor, Saputo Dairy Australia (SDA), has just announced its opening price for the 2022-23 season at a “weighted average farm gate milk price for non-exclusive supply of $8.50 per kilogram milk solids”.

It’s a significant increase from the $6.55kg opening last year.

“The minimum price is the price we will pay monthly to suppliers for non-exclusive 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),” said Saputo this week,

“In addition to the minimum price, SDA will continue our usual additional payments to suppliers, including the monthly milk quality bonus, productivity payment and off-peak payment.

“In addition, for the 2022-23 milk year, we will offer exclusive Milk Supply Agreements (MSAs) in our Northern Region and South-West Victoria and South Australia region.

“We see the introduction of exclusive MSAs as a necessary step in response to changed market conditions in these regions. The minimum milk price in our two exclusive MSAs includes a premium of 10 cents per kilogram butterfat and 20 cents per kilogram protein (approximately $0.15 cents per kilogram milk solids) over our minimum price in the non-exclusive MSAs.

“Finally, while the Code allows prospective step-downs in limited circumstances, SDA has again committed to no price step-downs in any circumstances during the year, which honours our ongoing promise to suppliers.”

Other prices

• Bega Cheese announced a record opening price of $8.40/kg in April, for supply in its Victorian and Riverina collection areas, together with a 10¢/kg MS step-up for the 2021-22 financial year.
• Burra Foods announced an opening milk price range of $8.20-$8.60/kg MS for the 2022-23 season in May.
• Fonterra has reportedly opened at $8.25.