WARRNAMBOOL Cheese and Butter (WCB) has surpassed its end-of-year milk price forecast with the season barely past the halfway mark.
The Allansford processor yesterday announced a farm gate price increase of 20 cents per kilogram of butterfat and 50 cents per kilogram of protein.
The hefty step-up takes the company’s weighted average milk price to $6.40 per kilogram milk solids.
The increase puts WCB’s price ahead of Murray Goulburn, which increased to $6.25 in December, and Fonterra, which lifted to $6.10 in November.
The step-up takes the weighted average price above the end-of-season projection.
“We believe it is likely that average closing prices may now exceed $6.50 per kilogram milk solids,” WCB chief executive David Lord said.
The higher prices follow greatly-improved trading conditions since the forecast was made at the start of the season.
“It is pleasing to see that some of the key drivers of our business performance continue to remain strong,” Mr Lord said.
“International dairy commodity demand and prices are holding at current high levels and the Australian dollar has continued to devalue against the US currency.”
He said the company’s focus on developing a higher-value product mix also contributed to stronger business performance.
“The new lactoferrin extraction plant is now in commissioning phase and producing quality product in specification.
“All of these factors give us further confidence in our outlook for the remainder of the season,” Mr Lord said.