FONTERRA farmers who opt to take part in the company's Fixed Base Milk Price will be paid $6.80 per kilogram of milk solids for up to 70 per cent of their milk this season.
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Matt Watt, the company's farm source general manager, said the continued interest in the program indicated farmers wanted to reduce their exposure to market volatility. "Fixed Base Milk Price is like having a fixed interest rate on your mortgage versus a variable rate," Mr Watt said.
"You know exactly where you stand with a percentage of your production and this can help to manage margins and make decisions about investing in cost management opportunities."
Mr Watt said seasonal conditions and market fluctuations impacting the milk price were key concerns for farmers. "We can't control the climate, but with Fixed Base Milk Price we can at least help to take out some of the market risk," he said.
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