Mepunga dairy farmer Bruce Holloway is happy to have certainty around the price he is getting for the product he supplies to Australian Consolidated Milk.
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Australian Consolidated Milk (ACM) is offering a "floor" price of $6.50 per kilogram of milk solids for current suppliers and farmers that sign up by March 31.
"It's good to be able to sign a contract for 12 months and have a minimum price," Mr Holloway said.
It could be lifted-up, but it's never moved down.
- Bruce Holloway, Mepunga dairy farmer
"At least we can run a budget against it."
With the instability in the dairy industry over the last five years, Mr Holloway said ACM had paid prices "as good as anyone in the western district, or better".
"You know what you are going to get, (the price) is not going backwards," he said.
ACM general manager commercial Peter Jones said suppliers were in a better position to make decisions if they had information about pricing up front, adding that farmers who signed on would get the safety of the floor price plus any increase if the price opened higher.
"We are trying to provide certainty," Mr Jones said. "We are trying to take some of the risk out of the equation."
A new factory at Girgarre, in the Goulburn Valley, will help ACM to provide benefits of scale to all suppliers, even though milk from south-west Victoria will be sent to boutique dairy customers for processing.
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