Bulla Dairy Foods lifts farmgate milk price as ice-cream sales boom

COVID-19 lockdowns have boosted demand for Bulla’s dairy treats, as Aussies spend more time at home. Now dairy farmers are benefiting as it breaks ranks to step-up prices.

Dairy farmers that supply Bulla, which sources milk directly for its products, including the Creamy Classics ice-cream range, are getting a step-up.

EXCLUSIVE: BULLA Dairy Foods has broken ranks to be the first milk processor to deliver a farmgate price step-up this season.

The increase brings the price for the 2020-21 season for Band 1 suppliers to $6.80, a rise of 10 cents a kilogram of milk solids, which will be paid retrospectively on milk supplied to Bulla from July 1, 2020.

“This year has been a challenging year for everyone, however, we wanted to end it with some positive news for our farmers leading into Christmas,” Bulla chief executive Allan Hood said.

“We’ve had a strong run into Christmas,” Mr Hood said, despite suffering the disruption of a COVID-19 outbreak at the company’s Colac plant in September.

But every cloud has a silver lining, with Mr Hood reporting the COVID-19 lockdown drove a surge in Australian household’s demand for Bulla cream, up 23 per cent in the past year, while its ice-cream sales surged 20 per cent.

“There’s been more people at home, and more people cooking,” he said. “We are forecasting our biggest Christmas and summer period ever.”

He said the recent growth and strong outlook allowed the company to pay farmers what it could afford, in the form of the 10c/kg MS step up in the lead-up to Christmas.

“Normally we wait until after the summer peak,” Mr Hood said. “(But) the increase allows our farmers to securely plan for the next couple of months and it further demonstrates our appreciation for their ongoing supply, support and efforts to consistently deliver high-quality milk”

He said the increase would also help it boost market supply, in what was a highly competitive market for farmers’ milk.

Bulla maintains a simple and transparent pricing approach. There is no stop charge, volume charge or collection charge, so farmers receive 100 per cent of the price. The company also applies a flat payment model to improve farmers’ cash flow throughout the season.

Bulla’s updated price for the 2020-2021 season announced today is as follows:

Bulla Dairy Foods farmgate milk prices

Bulla has 170 farmer suppliers, feeding 330 million litres into its plant annually.

Mr Hood said Bulla Dairy Foods had expanded its workforce by 180 to 700 employees on the back of strong sales growth, plus to a lesser degree the need to meet COVID-19 staff separation protocols.

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