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The increase of one cent per reference litre is in addition to Dairy Farmers’ recently announced milk price package for Northern Region farmer suppliers.
Dairy Farmers Chief Executive Rob Gordon said the Co-operative had an obligation to be responsive to its farmer suppliers needs, as well as recognise the competitive forces at play in the environment in which it was operating.
“To secure supply, we are announcing a one cent per reference litre increase in the price the Co-operative pays Northern Region farmers for their milk,” Mr Gordon said.
“As a result of this improved milk price, we estimate that the average price paid to the Region’s suppliers will be 34.4 cents per reference litre. This improved milk price is also designed to encourage higher production among our Northern Region farmer shareholders.
“The pricing package includes minimum price commitments for a period of three years for those willing to enter into defined volume contracts, the terms of which include a safety net base price of 31 cents per litre for two years and 30 cents for the third year before any incentives.”
The agreement follows feedback from farmer members and its representative body, the Dairy Farmers Milk Co-operative, about on-farm costs as well as increased competition in the Region.
Dairy Farmers’ Farm Services Officers are working with Northern Region suppliers to evaluate the benefits of the package including the newly announced increase in milk price. For those suppliers willing to move quickly, there is the added reward that all contracts signed and received at the Dairy Farmers Sydney head office by 5 August 2005 will have their incentives package backdated to 1 July 2005.
