In accordance with the Dairy Industry Code of Conduct, which commenced on 1 January 2020, SDA has published its opening minimum milk prices in its standard non-exclusive Milk Supply Agreement (MSA) for the Southern Milk Region. The minimum prices are the price SDA will pay monthly to suppliers for premium quality milk.
In addition to the minimum prices in our MSA, SDA will continue additional payments to suppliers, including the monthly milk quality bonus, productivity payment and off-peak payment. Together, the minimum prices and additional payments result in the weighted average farm gate milk price.
SDA’s standard MSA and pricing model promotes simplicity, transparency and fairness for all suppliers to help them plan for the year ahead with certainty and confidence.
While the Code allows prospective step-downs in limited circumstances, SDA has again committed to no price step-downs in any circumstances during the year, which honours our ongoing promise to suppliers.
Determining the outlook for milk prices for the 2020/21 milk year has been particularly challenging. Heightened uncertainty and rapidly-changing conditions arising from COVID–19 will continue to impact world economies and the dairy market for the coming milk year.
Despite this, SDA’s objectives remain the same. We are well placed, with our diverse product mix and markets, to adjust to evolving market conditions and continue maximising the value of every litre of milk.