SOUTHERN Australian dairyfarmers are heartened by stronger opening-season farmgate milk prices that continue to flow in.
Following Murray Goulburn's announcement two weeks ago of a $5.60 a kilogram milk solids opening, Fonterra Australia followed on Friday last week with the same price, then a project closing price of about $6/kgMS.
Warrnambool Cheese & Butter followed later the same day, first announcing a step-up of 6 cents/kg butterfat and 15c/kg protein, backpaid to July 1, 2012, before announcing its milk price for 2013-14 of $5.65/kgMS - 25 per cent higher than last year's opening price.
WCB is forecasting a full-year price range of $5.90/kgMS to $6.10/kgMS.
Chief executive David Lord said markets and exchanges were volatile and could move very quickly in a positive or negative direction.
"In this environment we need to be aware that this volatility can impact on the industry and on milk prices paid," he said.
But after hinting at an opening price of $5.85/kgMS in late May, United Dairy Power has again upped the ante by announcing yesterday it will open at $6.05/kgMS.
UDP managing director Tony Esposito said the price was a reflection of the hard work put in by the company's management team in restructuring and bringing together its businesses in South Australia and Victoria.
"Milk throughout for the factories at Murray Ridge and Jervois is tracking really well," he said.
"For the first year the support has been great and we want to show farmers we're committed, and we've already invested quite a bit on both sites and we intend to continue doing that.
"At the moment we've got about 250 million litres going through but we expect that to increase."
The company would be aggressively pursuing more supply, and took aim at other processors who "just add 5c cents to Murray Goulburn's opening price".
"We don't run that sort of business and don't follow what other people do," he said.
"The biggest disappointment is watching these companies just following MG and not operating on their own, which doesn't encourage farmers at all."
He said UDP was trying to strengthen its business to shield itself more from market fluctuations by implementing longer-term contracts and working with committed markets.
South Australian Dairyfarmers Association president David Basham said farmers desperately needed the higher milk prices. "Whether the prices are good enough for farmers is hard to say, as they've made such large losses over the last 12 months and need to repay that debt, but it's certainly optimistic to have significant increases in prices," he said.
*Full report in Stock Journal, June 20 issue, 2013.