Bulla the first major processor to announce opening prices

Bulla has fired the opening shot of the new dairy season, having announced their “starting position” to dairy farmers.

Bulla has fired the opening shot of the new dairy season, with an opening 2023-24 farmgate price of $8.80 to $9.60 per kilogram milk solids.

But the Colac-based processor made it clear to farmers the price, announced on Wednesday, was “a starting position” in what was sure to be a competitive season.

“We will make the necessary adjustments to our price to ensure we deliver another strong season for our valued farmers,” Bulla general manager for dairy and procurement Rohan Davies said.

Bulla’s suppliers are divided into four bands, based on consistency of supply.

Band 0 suppliers – those maintaining the most consistent supply – will receive an opening price of $9.40 a kilo milk solids. Band 1 suppliers have been offered $9.20 a kilo milk solids; Band 2 at $9.00 and Band 3 at $8.80.

Milk2Market commercial manager Richard Lang said Bulla had delivered a very competitve opening price, given the recent slump in global dairy commodity prices.

Bulla has introduced a premium of 20c/kgMS if producers meet a new peak to trough (PT) ratio on the last two years’ of production.

The PT ratio is calculated as total sping production of milk solids (September to November) divided by February to April production.

Farmers have also been given a choice of delivering protein to butterfat ratios of 2:1 or 1:1.

Mr Davies said “with the current economic climate showing so much volatility and uncertainty, we believe we have opened with a strong and market relevant opening price for the season ahead.

“Our team has been forecasting and planning for the upcoming milk season for some time, taking into account current market conditions.

“This has put pressure on our business like many businesses in our industry and wider and has been a factor in our planning for the season ahead.”

Under the mandatory code of conduct, processors must release their opening milk price to suppliers by 2pm on June 1.

Bulla is again the first to release its prices this year, having been the first to pull the trigger in 2022 and 2021, prompting other players including Saputo, Bega and Fonterra into action.

Initial farmgate offerings in March 2022 hovered between $7 and $7.50 per kilogram milk solids, but a bidding war erupted and lifted the price to more than $9 per kilo by the June 1 deadline.

United Dairyfarmers of Victoria president Mark Billing has previously said the opening price for the 2023-24 season needed to be above $9 per kilo milk solids to preserve industry confidence.

Bulla currently has more than 200 farmer suppliers.