The opening price includes a 2013/14 special step-up of nine cents per kilogram butterfat and 19 cents per kilogram protein to be paid to suppliers on 15 July. This step-up will bring forward approximately $1.5 million to suppliers earlier in the season. New suppliers to TDP will also be offered this special step-up.
TDP Chief Executive Officer Tony Catania said this payment, combined with the previous step-up payment announced on 29 May, would assist with cash flow during the lower winter production season when it was most needed by farmers.
“The forecast milk price for 2013/14 is based on continued strong prices for key dairy products, particularly during the first half of the season,” he said.
“The recent weakening of the Australian dollar is also a positive sign in this context, and is very much welcomed by our business given TDP’s reliance on exports.
“As we enter our second season, we should expect continued improvement within our factory operations at Smithton in the key areas of quality and efficiency.
“We expect this to be strengthened further by forecast increases in milk volume.”
Mr Catania said that to remain aligned with its major shareholder, Murray Goulburn, TDP would offer its suppliers a single milk price structure, complemented by a series of incentives that rewarded off-peak production and milk production growth.
“The system is designed to improve profitability and cash-flow on-farm,” he said.
Mr Catania said this significant increase in milk price, coupled with the special prepaid step-up, would provide dairy farmers in Tasmania with the much needed confidence they deserved entering the new season.