Burra Foods has announced an opening milk price range for the FY19 season of $5.60 – $5.90/kg Milk Solids, an 8% increase over last year’s opening price.
In an innovative step, Burra is also offering all Milk Supply Partners the opportunity to be paid on a 1:1 fat to protein ratio, reflecting the strong market returns for fat.
“We have seen consistent strength in the demand for fat products across our product range and want to both reward and incentivise our supply partners accordingly,” said Grant Crothers, Chief Executive Officer of Burra Foods.
Burra Milk Supply Partners will have the option of selecting either a 1:2 fat to protein ratio or the unique 1:1 fat to protein ratio at the start of the season.
“Altering components on farm is not a quick or simple exercise and we recognise that many supply partners have geared themselves towards protein production which is why we are providing the option of either payment system,” said Mr Crothers.
“Offering both payment ratios provides our Milk Supply Partners the opportunity to increase the value of their milk, regardless of breed or feed.”
The milk price range reflects existing market conditions and includes the Commitment Bonus offered in July 2017.
“There are plenty of analyst forecasts being published with full year prices, but we believe this price is reflective of current market returns for our Gippsland Milk Supply Partners and as in prior years, retrospective step ups will be paid as the market improves,” said Mr Crothers.
Mr Crothers said that Burra Foods is not looking to grow significant volumes of milk in the coming season, but believes the new 1:1 payment ratio will attract interest from higher fat producing herds and will be happy to sign them up.
“We have invested heavily in capacity and capability to meet our increasing demand and believe that higher fat producing herds will support our continued growth,” he said.