Fonterra will pay its Australian suppliers $5.30-$5.70 a kilogram of milk solids next season.
In what appears to be a move to prevent milk supplies shifting to competing factories, Fonterra will also pay 40c kg/MS milk solids to current, retired and recommencing suppliers.
That will bring the 2017-18 farmgate milk price to $5.70-$6.10kg/MS.
The extra 40c kg/MS appears to be in direct response to Murray Goulburn’s decision last week to ”forgive” its clawback.
In a statement, Fonterra said it would pay back the interest charged for the Fonterra Australia Support Loans package from the 2016-17 season.
“We said we would consider Murray Goulburn’s recent announcements including the decision to forgive its Milk Supply Support Package. We’’ve consulted with the Bonlac Supply Company on the best way to response to our suppliers,” Fonterra Australia managing director René Dedoncker said.
The Bonlac Supply Company welcomed the announcement.
“With the additional payment being available on next season’s production it gives our farmers the opportunity to get more out of it if they wish to grow,” Bonlac Supply Company chair Tony Marwood said.
“It also puts money in farmers’ hands almost immediately to assist with cashflow.
Source: The Weekly Times