Dairy farmers learn opening season milk price from Tatura Milk
As expected, dairy farmers are being told they will be paid less for their milk next season.
World dairy prices have fallen sharply in the last 18 months and many farmers were expecting lower prices when the new season begins with the coming financial year.
Tatura Milk is one of the first major export companies to release its price and will pay will pay $5.60 a kilogram for milk solids (roughly 41.9 cents per litre), down from $6 a kilogram last season.
Tatura Milk Industries will pay suppliers an opening milk price of $5.60 kilogram for milk solids. (Photo: Sarina Locke)
Whilst lower than last season, the price is still above the average cost of production of $5.34 kg/ms for northern Victorian farmers cited in the Department of Economic Development's 2014 dairy farm monitor report.
Executive chair of Bega Cheese and Tatura Milk, Barry Irvin said the company had to pay less.
"The truth is that the international markets have significantly declined over the last twelve months, somewhere between 25-40 per cent down," he said.
"We've pushed hard to come up with a very strong opening price of $5.60 and of course we'll look to review that throughout the year as we expect some market improvement.
"Of course, market volatility is important in these matters."
Mr Irvin believed Tatura Milk's opening price would be competitive with other major dairy processors.
Despite the lower price, the company believed supply of milk to its factory would increase this year.
Source: ABC Rural, Warwick Long, June 24th 2015
