THREE days after announcing its opening price of $6.65kg MS, Saputo Dairy Australia (SDA) has revised its offer to suppliers in the Southern Milk Region for the 2021-22 season to a weighted average farm gate milk price of $6.85 per kilogram milk solids.
The revision puts Saputo equal to or slightly ahead of the competition; Fonterra also revising up to $6.85kg MS today, Bulla $6.40 – $6.90kg MS and Burra Foods $6.40 – $6.80kg MS but as they say, it’s not where they start but where they finish that matters most.
The company made the following statement on Friday, June 4:
“Saputo is committed to paying our suppliers competitive milk prices. On this basis, Saputo Dairy Australia (SDA) has announced a revised 2021/22 opening weighted average farm gate milk price of $6.85 per kilogram milk solids in the Southern Milk Region.
“SDA has published revised opening minimum milk prices in a standard non-exclusive Milk Supply Agreement (MSA) for the Southern Milk Region, with minimum prices representing the price we will pay monthly to suppliers for premium quality milk.
“Together, the monthly minimum prices and the additional payments described in our MSA (being the monthly milk quality bonus, monthly productivity payment, off-peak payment and monthly Northern Region payment) result in the weighted average farm gate milk price.”
But it might be as much about meeting the direct competition, after Fonterra’s lift, than anything else.
On June 1, 2021, SDA said:
“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 2021/22 milk year has again been challenging, despite some recent improvements and stabilisation in global trade conditions. Ongoing uncertainty in commodity prices and exchange rates arising from the COVID–19 pandemic is expected to 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.”