Opening milk prices: Bega raises 2021-22 price in southern Victoria
A farmgate frenzy has erupted for milk supply in Victoria with Bega the latest processor to raise the stakes ahead of the 2021-22 season start date.
Bega has lifted its opening price by 20 cents as processors scramble for supply in the final days before the start of the 2021-22 season.
At the June 1 dairy code of conduct deadline, Bega started with a figure of $6.80/kg milk solids for southern Victoria and $7.00/kg milk solids for northern Victoria and the Riverina.
On June 10, that figure was revised to $6.94/kg milk solids in southern Victoria and $7.09/kg milk solids northern Victoria and the Riverina.
In a new letter to suppliers, Bega executive chairman Barry Irvin indicated the processor’s latest offering would increase in southern Victoria and southeastern South Australia to an effective average of $7.14/kg milk solids.
A similar rise in northern Victoria and the Riverina was not announced.
“Since revising our opening milk prices on June 10, 2021, we have been carefully reviewing the market for our products and the continued strong competition for milk supply,” Mr Irvin wrote.
“Whilst market fundamentals remain stable for our product returns, the competitive market for milk supply is very strong with many companies adjusting their milk prices over recent weeks impacting our competitive position.”
Mr Irvin’s letter comes only days after Fonterra confirmed an average weighted price of $6.95/kg milk solids, up from the $6.55/kg milk solids figure initially offered last month.
The $6.55/kg figure was confirmed on the June 1 mandatory code of conduct deadline, then raised to $6.85/kg only days later.
On Friday, Fonterra Australia managing director René Dedoncker said the rise in the average farmgate milk price comprised of 8c/kg for butterfat and 11c/kg of protein.
“The price rise to $6.95/kg milk solids takes us to the top end of the forecast range we provided when we opened on 10 May, and reflects our commitment to supporting our farmers and paying a competitive milk price,” he said.
Last week, Saputo also raised its opening price to an average of $6.95/kg milk solids.
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