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Fonterra step-up

Fonterra Australia announced a step-up last week, taking its milk price to about $6.95 kg milk solids.

August 12, 2014 3:06am

Fonterra Australia announced a step-up last week, taking its milk price to about $6.95kg milk solids.

The latest increase lifts the price by 8¢/kg butterfat and 20¢/kg protein for 2013-14.

The increase places the price near the top end of Fonterra’s 2013-14 forecast average closing price range of $6.80-$7kg/milk solids.

Fonterra Australia managing director Judith Swales said the announcement continued the company’s price leadership through the 2013-14 season and supported suppliers.

‘‘We know that with the recent market volatility, getting this step-up out on farm strengthens cash flow for our suppliers and hopefully gives them confidence as they plan for the next 12 months,’’ Ms Swales said.

‘‘Whilst we are not in a position to announce our closing price for 2013-14 at this point, getting cash on-farm, quickly and when it counts, is a key part of our commitment to ensuring farm businesses are sustainably profitable and able to grow.’’

Ms Swales said recent market conditions confirmed the responsible nature of Fonterra Australia’s opening price for the 2014-15 season and Fonterra’s current price and forecast range for 2014-15 remained unchanged at this early stage of the season.

Bonlac Supply Company chairman Tony Marwood said the step-up was great news for farmers.

‘‘While we are in a volatile period, a step-up like this helps farmers with cash flow and planning for the year ahead,’’ he said.

‘‘It should give suppliers confidence that Fonterra Australia is committed to its partnership with Australian farmers.’’

Individual suppliers’ milk prices will vary across Fonterra’s supply regions, depending on the individual farm’s milk profile, regional production factors, milk quality and farm management systems.

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