15 Oct 2017

Step Up Means More Cash For Dairy Farming Enterprises

With the sun shining a bit brighter for longer each day and the forecast predicting higher temperatures for this week, it is safe to say spring has formally arrived!

Our daily milk volumes into Burra continue to increase as we move closer to peak. With extra capacity now online we are managing record volumes for the site while working hard to get the right product mix to meet the firm demand from established and emerging markets.

The unique imbalance in returns for butterfat and milk protein is well reflected in the Global Dairy Trade auction results and it is difficult to see a fundamental change in the foreseeable future. We live in a world of milk protein surplus while butterfat achieves record prices - yes, butter is back! While no one is immune from low protein prices, our product mix is somewhat protected and this is one of the reasons Burra was able to announce a $0.10/kg MS step up to all Milk Supply Partners yesterday.

As said previously Burra must turn its back on other processors and the turbulence they brought to the market and build its own supply chain in its own way. This step up is one more initiative to do just that.

It is pleasing to know that almost 90% of our Milk Supply Partners took up the $0.40/kg MS Commitment Bonus offer at the start of the season which injected nearly $9 million into our Milk Supply Partners’ businesses. This step up, applying retrospectively to milk supplied from 1st July 17, provides a further cash injection when paid on November 15.

I look forward to continued good news for our Milk Supply Partners as we keep taking the opportunities presented to us.