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Australian dairy co-op Murray Goulburn has increased its milk price in an attempt to keep its farmer suppliers from switching to other co-ops.
Murray Goulburn originally quoted a price of $4.70/kg milk solids to its farmers on 6 June, which is equivalent to a price of 24c/l in euro terms at base fat and protein rates.
Slammed
The opening offer was slammed by farmers as it was significantly lower than its rival co-ops’ prices of around $5.50/kg MS.
Now Murray Goulburn (MG) has increased its offer to €5.20/kg MS, which is the equivalent of (26.6c/l).
It also raised its forecast for the full year farmgate price to range to $5.20-$5.50/kg MS.
MG issued a statement that said: “The previous opening price announcement on 6 June 2017 was earlier than in prior years in order to try to assist suppliers with budgeting and business planning.
“Since then, MG has had the opportunity to review the 2017/18 budget assumptions, which include dairy commodity prices, exchange rates and achieving cost out initiatives, as well as achieving milk intake of approximately 2.5bn litres.
“The updated FMP (farmgate milk price) has also taken into account improved commodity prices reflecting anticipated market returns, together with additional contracted sales.”
Maintain milk supply
The co-op added that it needed “to maintain milk supply and provide improved cash flow for suppliers. The decision to revise the opening price to $5.20/kg MS is intended to assist in maintaining competitiveness and support the supplier base.”
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