Chief Executive Officer, Grant Crothers, announced the strong opening price in a letter to be sent to all Burra Foods’ farm milk supply partners this week. Burra Foods is forecasting a 28% increase in the opening milk price for next season.
The dairy market has experienced unprecedented price movements across the main dairy commodities during the 2013 calendar year.
“Burra Foods has remained focused on capturing as much of the improvement to commodity prices as our milk volumes and product mix have allowed”, Mr Crothers said.
The increase announced by Burra Foods is a much needed boost for many dairy farmers that are in recovery mode following a long period of below average returns and difficult seasonal conditions.
Mr Crothers took the opportunity to thank his supplier base for their ongoing partnership through these difficult times.
“It’s only with the continued and loyal support from our farm milk partners that allows us to grow our milk intake volumes each year, ensuring we can compete at world’s best practice levels for efficiency and continue to deliver on our commitment to pay a premium for milk in Victoria”.
Mr Crothers also raised concern at some of the misinformation in opening prices that were announced by some of the major processors in recent weeks.
“It seems that some processors are in the habit of announcing an opening price that is theoretically "available” but which no supplier in the pool can achieve as it’s so far away from a typical supplier.
When the actual prices as announced are applied to an average sized Gippsland farm it can be up to $0.40kg/MS less, a difference that is far too significant, he explained.
The opening price announced by Burra Foods will see a range of $5.25 to $5.65 kg MS due to each farm milk supply partner having a different seasonal supply curve, production profile and composition.
Burra Foods expects to process more than 275 million litres at the Korumburra site next season.
