WCB's opening price is approximately 25% higher than opening prices announced at this time last year.
WCB's forecast full year price range is AU$5.90 to $6.10 per kilogram milk solids. This full year forecast is indicative only and will be assessed as part of the quarterly price review process.
CEO David Lord highlighted that "As the Industry has experienced in recent years, markets and exchange rates are volatile and can move very quickly in a positive or negative direction. In this environment we need to be aware that this volatility can impact on the industry and on milk prices paid."
Dairy Market Outlook
There has recently been significant improvement in world dairy prices. While it appears that prices have peaked and eased slightly they remain at historically high levels. Further, more recently there has also been an easing of the Australian Dollar with it moving back through parity to be currently trading in the 95 cent range.
CEO David Lord stated "These movements have been very positive and give us confidence in our outlook for the first half of the season where we anticipate world dairy priceswill remain strong. Given the volatility of the many external factors, such as; milk supply growth, market demand, world dairy prices and exchange rates make it difficult to predict in the longer term, we maintain a cautious approach to the second half of the year."
Final Step Up
Warrnambool Cheese & Butter (WCB) today announced a final step up in milk price for the 2012-13 season of 6 cents per kilogram for butterfat and 15 cents per kilogram for protein. This payment is retrospective and applies to milk supplied from 1 July 2012. The payment will be made with June 2013 proceeds during July 2013 to current milk suppliers.
CEO David Lord said of the announcement "This increase once again delivers on WCB's commitment to delivering a strong competitive milk price for our suppliers in a very difficult year and takes our final average milk price to $5.00 per kilogram milk solids equivalent."
Business Improvement Initiatives
WCB's focus remains on executing our strategy and to implement the value creating projects currently underway to help mitigate some of the fluctuations in the commodity price and exchange rate cycle. During the year a number of these initiatives have been realised including:-
- a new premium low fat cheese, Kraft 'Livefree" supplied exclusively to Kraft;
- entry of WCB branded cream cheese into the export market under a manufacturing
arrangement with Kraft;
- an upgrade to our Whey Protein Concentrate plant to produce WPC in an instantised
- the continued growth of our Great Ocean Road cheese and milk brands though our
arrangement with Coles; and
- planning to construct and commission a lactoferrin plant at our Allansford site during the next financial year.
These initiatives will continue to positively impact WCB's performance in the coming financial year.
CEO David Lord said "Our business has long had a continuous improvement culture to ensure that all aspects of the business operate effectively and as efficiently as possible and
we continue to control and drive costs down."