Despite a strong dollar and falling commodity prices, a major milk processor on the New South Wales south coast is confident that it can maintain supply and continue to build.
Bega Cheese is to pay its New South Wales suppliers $7.22 per kilogram (gross) for milk solids this financial year.
“We will compete and seek to lead,” said Barry Irvin, Bega’s executive chairman.
Across the border in Victoria, Bega will be paying $6.00 per kilogram (net) for milk solids.
The company’s major competitors Murray Goulburn, the country’s largest dairy processor and Fonterra late last month announced their prices.
Murray Goulburn is to pay its southern milk pool $6.00 per kilogram for milk solids which is just under $0.50 a litre, a seven per cent increase on the previous year.
While Fonterra announced a slightly lower $5.80 per kilogram for milk solids many of its suppliers have written into their contracts that Fonterra will match or better Murray Goulburn’s offerings.
Bega Cheese Executive Chair Barry Irvin remains “positive about the opportunities for producers”.
“I think what’s happening across the industry with this really strong competition, all dairy companies are recognising that there are strong opportunities out there in the future.
“We’ll always see volatility because in the end we are affected by global commodities and currency.”
Source: ABC Rural