Bega Cheese chairman Barry Irvin told farmers the company was now in a position to announce a record opening average price of $8.40 kg/MS.
Processors have to file opening prices by June 1, under the national Dairy Code of Conduct.
Mr Irvin told suppliers the step-up would apply for the full financial year and reflected strong global dairy commodity markets.
It also reflected Bega’s endeavour to deliver a competitive milk price.
Mr Irvin said the price was an average, based on the estimated total milk supply for the region, other than the South Australia central section, which the company expected to collect in the new financial year.
That was based on the last 12 month’s production profile of suppliers for milk that met Bega’s quality requirements.
It was also based on the total amount payable for that milk using Bega’s 2022/23 monthly minimum milk prices for exclusive contracts, less estimates of stop fees and plus incentives based on past production.
Incentives the company expected to pay, based on past production, were also part of the calculation, although industry fees were yet to be deducted.
That resulted in a weighted average.
“As all Bega suppliers have different production profiles,they may receive a milk price higher or lower than our estimated average,” Mr Irvin said.
“Depending on supplier size and supply profile, most of our suppliers will receive an opening milk price in the range of $8.20kg/MS to $8.60kg/MS.”
