Push for earlier release of opening milk prices

Late announcements: The tardy release by dairy processors of opening milk prices for the 2018-2019 milk season causes business planning problems for dairy farmers, the UDV says.
Late announcements: The tardy release by dairy processors of opening milk prices for the 2018-2019 milk season causes business planning problems for dairy farmers, the UDV says.

VICTORIAN dairy farmers are demanding milk processors improve their performance on opening price announcements, calling for information that is transparent and reflective of the market.

United Dairyfarmers of Victoria (UDV) president Adam Jenkins said dairy farmers needed early and transparent opening prices to budget for the coming season and plan for the year ahead.

“Milk processors must show respect for dairy farmers and regional communities by committing to announce a timely, realistic opening price so their suppliers can plan next year’s budget,” Mr Jenkins said.

“Farmers are desperate for certainty and it is simply unacceptable, especially considering the challenging conditions of the past two seasons, for processors to stall or misrepresent their opening price announcements,” he said.

Victorian dairy processor Burra Foods released an opening range of $5.60-$5.90/kilogram milk solids (kgms) last week, which the UDV said included the annualised portion of a Commitment Bonus offered in July 2017, which is about 13c/kgms.

While the UDV welcomed Burra’s early announcement and the option it gave suppliers to switch to a 1:1 Butterfat:Protein payment ratio, it criticised “what is an unachievable opening price for many.

“Any incentive payments need to be clearly separated from the opening farmgate milk price. These muddled announcements are misleading and not reflective of the current market price.” Mr Jenkins said.

The UDV is currently running a roadshow throughout Victoria to gain farmer support for its campaign for processors to simplify their milk payment structures, including announcing opening prices that reflect the true value of milk.

“We believe a simplified structure will address farming system inefficiencies and confusion around complicated milk payment calculations,” Mr Jenkins said.

“There is only so much dairy farmers can take before they start allocating their resources to other farming pursuits, he said.

In other developments, Jersey Australia welcomed Burra Foods’ offer to suppliers to pay more for high fat milk.

Milk from Jersey cows has a naturally higher fat content than that from the dominant Australian dairy breed, Holstein-Friesian.

Jersey Australia president Chris MacKenzie, of Timboon, said Jersey breeders would “welcome the move to provide them a fairer return for their higher fat content milk.” 

Global shortages of butter and milk fat products have led to increased emphasis on fat in milk payments, but payments for protein in milk still outweigh the payments for fat.

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