19 June 2018
2018/19 Season Opening Milk Price for the Southern Milk Region
We are pleased to announce an opening average milk price for the 2018/19 season of $5.75 per kilogram milk solids for all Warrnambool Cheese and Butter (WCB) and Saputo Dairy Australia (SDA) suppliers in our Southern Milk Region.
This opening price represents our current assessment of expected market conditions for the coming year. We believe it is responsible and allows room for upward movements if improved market conditions are realised throughout the year. We are pleased to report that export market conditions have continued to improve in recent months.
Our closing average price in the coming season remains dependent on the many external factors that impact our returns. We will monitor market conditions as the season unfolds and update you as part of our quarterly milk price review process in October, January, April and June.
Milk Payment Structures
As previously communicated, we will continue to operate with separate handbooks for the SDA and WCB supply groups for the 2018/19 season with no major changes to current terms and conditions. We intend to fully combine our SDA and WCB supply groups from 1 July 2019 and provide an integrated range of pricing programs under one handbook.
In this transition year and to ensure that no supplier is disadvantaged, we will provide every supplier with the best available milk price at the end of the 2018/19 season. Simply put, this means suppliers will receive the highest price available to them based on both the WCB and SDA milk payment systems. This will ensure that all suppliers are paid the best available price at the end of the season regardless of their payment option during the year. This reconciliation will occur at the end of the 2018/19 season and a top up payment will be made if required.
Milk Price Commitment
The milk price commitment made to former MG suppliers to pay at least the equivalent price to the largest two processors in the Southern Milk Region extends to all SDA suppliers. As such, you can be assured that your milk price at the end of the year will be market competitive.
Monthly price tables for both SDA and WCB can be found on pages 3 and 4 of the attached letter. Please contact the field services team for an income estimate and to understand how the best available milk price may benefit you.
All suppliers will receive a 2018/19 Milk Supply Handbook in the mail in the coming weeks, containing full details of the Milk Supply Policies for the business you currently supply.
Our annual supplier meetings roadshow will begin on 9 July 2018 with Lino Saputo, Jr. and team in attendance. Full details will be provided in due course and we look forward to seeing you there. Our meetings will be combined and open to both WCB and SDA suppliers.
Thank you for your ongoing support and as always please contact the field services team if you have any queries or if we can assist you further in any way.
President and Chief Operating Officer
Saputo Inc. and Dairy Division (Australia)
To access a copy of this supplier letter, click here