Burra Foods milk supply partners will receive an increase of $0.07/kgMS to their milk price in coming weeks as the Gippsland-based milk processor passes on the benefits of a lower Australian dollar and solid demand in the first half of the year.
Burra Foods Chief Executive Officer, Stewart Carson, said a proactive approach to managing the Covid-19 pandemic, and subsequent economic trading conditions, has helped shelter the business in the short-term.
“We moved to change work practices at Burra Foods, before the government imposed its Covid-19 restrictions, and our objectives have been clear and simple from the start,” he said.
“Protecting staff and the factory to ensure continuous milk collection and production to defend the financial viability of Burra Foods.”
Daily temperature checks upon arrival at the Korumburra factory, wearing of face masks and increased sanitation are some of the defensive protocols put into place. “I’m proud of our staff and essential contractors and service providers, for complying with these restrictions. This, along with a weaker Australian dollar, has enabled us to increase the farmgate milk price.”
The step-up came into effect on May 1 and will be paid to suppliers on May 15.
The price increase will be applied to all eligible* milk solids supplied from July 1, 2019 to April 30, 2020.
Gippsland’s favourable seasonal conditions have resulted in Burra Foods current milk intake being 30 per cent up on the same time last year. Gippsland is now on track to be the largest milk producing region in Australia.
Looking forward, uncertainly clouds the dairy market.
Covid-19 has forced excess milk onto the world market as parts of the US and Europe struggle to cope with surplus milk amid the global shutdown, Mr Carson said. “We are closely monitoring the volatility in the global dairy landscape and are assessing likely impacts to our core markets.”
* Eligible milk solids excludes those subject to the FFMP (Fixed Farmgate Milk Price) arrangement.