Bega gives 2022-23 milk supply agreement indication after price release
Bega has issued a record opening price for the upcoming season. But when will its milk supply agreements be released?
Bega has revealed an opening price for the 2022-23 financial year of $8.40 a kilo milk solids, a record opening price for the processor.
Management also announced today a step up of 10 cents a kilo milk solids for northern and southern Victorian, Riverina and south-east South Australian suppliers, applicable from July 2021 to the end of the current financial year.
Bega Cheese chairman Barry Irvin said depending on supplier size and supply profile, most suppliers would receive an opening milk price in the range of $8.20 to $8.60 per kilo milk solids.
“As is always the case when setting milk price, it was important that we considered the returns in both the Australian and international markets,” Mr Irvin said.
“(We also considered) milk requirements for our significantly expanded portfolio of products and the competitive circumstances in each of our regions.”
With milk supply agreements yet to be released, Bega management says the crucial paperwork will be issued early next week.
Last month, Bulla was the first processor out of the starting blocks for the 2022-23 season.
The Colac-based processor confirmed in March an opening price of $7.40 to $8.00 per kilo milk solids for the coming financial year.
However, Bega is the first of the big three processors to confirm a 2022-23 price, with pressure now on Saputo and Fonterra to reveal their figures.
Bega beverage operations manager Mark McDonald said next season’s opening milk prices reflected the strength of Bega’s diversified branded domestic and international business.
“All our exclusive suppliers have a choice of milk price systems that best suits their farming business,” Mr McDonald said.
“That includes a introducing a new flat milk price system to support seasonal supply, broadening our 9/3 milk price system to more suppliers seeking early cashflow signals by including productivity incentives and maintaining milk price system that supports larger scale and flatter supply profiles.”
Processors are required to file opening prices by June 1, under the Federal Government’s Dairy Code of Conduct.
However, an April or May announcement can be revised by the processors in the weeks leading up to the June deadline, which occurred last year.