In a letter to Milk Supply Partners, Burra Foods Chief Executive Officer, Grant Crothers, noted that this step up was the result of a softening AUD against the USD, rather than market improvement.
“Global markets have remained relatively flat so far this season and in the case of the GDT, every auction bar one has declined since the start of June,” said Mr Crothers. “Thankfully, the Aussie dollar has depreciated by around 6% since the start of July which has enabled us to pass on as much benefit as we can to Milk Supply Partners via this step up.”
Mr Crothers noted that conditions were very challenging this year for many farmers, including dairy farmers in Gippsland.
“We acknowledge the tough business decisions our Milk Supply Partners are regularly making caused by dry seasonal conditions.
“It seems each sub-region is impacted differently, and we will continue to regularly review FMP considering all market conditions. We have heard the messages from our Milk Supply Partners about rising input costs and the decreasing availability of feed which is driving higher prices, so we anticipate this step up being welcomed,” Mr Crothers said.
“It’s never too early for a step up but it is unusual to see them announced before December 1st,” continued Mr Crothers.
“We don’t see the market changing in the short to medium term but are continuing to barrack the Aussie dollar down,” said Mr Crothers.
“Our persistence to maximise value from product mix is never ending and we continue to develop markets delivering superior returns.”