BEGA Cheese has announced an opening milk price of $5.85 a kilogram of milk solids for its Victorian suppliers the season starting July 1.

The Australian Securities Exchange-listed milk processor informed its suppliers of the price this evening.

Four months ago, when there was concern about low farmgate milk prices for the coming season, Bega Cheese confirmed it would extend its current pricing until September- paying the same for milk in July, August and September as it did last year.

This offer tonight, supersedes that commitment and comes after Fonterra opened at $5.85 a kilogram of milk solids last Thursday and Saputo at $5.75/kgMS last Tuesday.

Bega Cheese suppliers have the option to take an upfront payment of 25 cents a kilogram of milk solids- if they sign to supply the processor for two years- or 50c/kgMS if they sign for three years.

Bega Cheese suppliers will also receive a “loyalty payment” step-up of 7 cents a kilogram of milk solids (5c/kgMS butterfat and 10c/kgMS protein) on milk supplied this season. The step-up will be paid on July 15 and, according to the letter signed by Bega Cheese executive chairman Barry Irvin, will take this season’s price to $5.70/kgMS. This price increase would be paid to all suppliers who have supplied from July 1 2017 to June 30 2018.

Mr Irvin said it was “pleasing to see an improvement in the market and strong competition for milk”.

“As is always the case, we will keep our milk prices under review throughout the year and endeavour to reflect improvements in the market in our milk pricing,” he said.

Article sourced from www.weeklytimesnow.com.au