Warrnmabool Cheese and Butter (WCB) has stepped up its milk price for the 2017-2018 season from $5.50 a kilogram milk solids to $5.60 kgms.
The increase puts it ahead of Fonterra’s average farmgate milk price of $5.50kgms but Fonterra is also paying an additional payment of 40c kgms to existing and recommencing suppliers.
Murray Goulburn’s milk price is $5.20kgms while Bega Cheese’s is $5.60kgms.
WCB’s move is a sign the dairy industry is recovering from its past tough two seasons but the company is very cautious about the future outlook.
WCB said that since its announcement of its opening price of $5.50 kgms in June, demand and trading conditions for most of its dairy products had been relatively stable.
The skim milk powder market remained weak and continued to be weighed down by high global inventory levels.
The skim milk powder market remains weak and continues to be weighed down by high global inventory levels.Warrnambool Cheese and Butter
Export demand had also been restrained by some strengthening of the Australian dollar.
WCB also said global markets continued to be relatively well balanced.
There were some signs that global milk production might be increasing in key regions including the European Union, United States and New Zealand, which could dampen demand.
Those factors had led the company to maintain a cautious approach in setting its milk price, WCB said.