Bega Cheese has joined Burra Foods and Norco as processors to offer a step up for the 2020-21 season.
On Tuesday Bega announced it would increase their milk price by 10 cents per kgMS for its Victoriam, south-east South Australian and Bega Valley central suppliers.
In a statement Bega said the increase was reflective of the level of market improvement being experienced despite the COVID-19 and higher currency impacts locally and internationally.
"The increase reflects Bega’s continued position to ensure its milk price are competitive with other dairy processors in the various regions it operates," the company said.
"The increases do not apply to our new Bega Dairy and Drinks and DFMC contracted suppliers."
The increase takes the announced prices for FY2021 to $6.50 per kg ms in southern Victoria and SE South Australia, $6.65 in northern Victoria and $7.60 in the Bega Valley.
Undera dairy farmer Fred DeCicco supplies Bega and said the news was excellent to hear.
“This is our first step up for the year,” Mr DeCicco said.
“It’s really good to see and hopefully we keep going in this direction over the year.”
Milk from Mr DeCicco’s 220 cows goes towards infant formula, milk powders and cream cheese productions produced by the Tatura site.
“We (Bega suppliers) opened with a fairly attractive price compared to others, but the milk price is still lower than it was this time last year,” he said.
“In saying that, the cost of production is lower this year too because of the lower feed and water prices.”
In a letter to suppliers Bega Cheese chairman Barry Irvin indicated that Bega will continue to review farm gate milk price considering market changes and our competitive position.
He also said the company was "very optimistic" about future opportunities following the acquisition of the Lion Dairy and Drinks business.