The company yesterday announced a rise of nine cents per kilogram butterfat and 19 cents per kilogram protein, taking the weighted-average available price to $6.81 per kilogram milk solids (kgms). 

It was the co-operative’s final step-up before declaration of its season closing price in coming weeks.

Managing director Gary Helou said external factors including fluctuating international commodity prices and currency movements would be key factors in determining the final price.

“The continued focus is on improving performance through reducing costs and investing to support innovation and value growth contributed to this step-up,” Mr Helou said.

“Market demand for key dairy ingredients remains strong but increased milk supply from New Zealand, Europe and USA has led to recent declines in prices. Nevertheless dairy ingredients prices remain above historical average levels.

 “The Australian dollar continues to be stubbornly higher than we expect it to be and remains a source of risk to next year’s farmgate milk prices.” 

Murray Goulburn’s price rise followed a step-up this week by Warrnambool Cheese and Butter which took its average farmgate price to $6.85/kgms. Fonterra’s average price is $6.80/kgms.

Murray Goulburn opened the 2013/14 season at $5.60/kgms, then forecasting an end-of-season price of $5.80 to $6. 

Its most recent closing price forecast was made in April, predicting a range of $6.66 to $6.85. 

Yesterday’s price lift puts it near the upper end of the range.

shynes@fairfaxmedia.com.au