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Synlait ups the milk price ante

Synlait ups the milk price ante

Canterbury milk processor Synlait has fired the dairy equivalent of a full broadside by upping its forecast milk price for 2013/14 to a range of $8.30 to $8.40 per kilogram of milk solids (kg/MS).

“Before Christmas, the coop Westland Milk Products lifted its in-season forecast to $7.90-$8.30 kg/MS. Now we see Synlait joining the fray to be in the same ballpark as Fonterra,” says Willy Leferink, Federated Farmers Dairy chairperson.

“Of course, Open Country operates a continuous payout while we know Miraka will be highly competitive as will be that darling of value-add, Tatua.

“For farmers, this level of farm gate competition is positive with other processors getting closer to joining the market.

“Importantly, we are getting advance rates that will help cashflow following the train wreck drought hit season that was 2012/13.

“Since the dividend is a key marker of Fonterra’s ability to add value to what we produce, we’ve seen it flat line then dip sharply. That’s not exactly the right trajectory as it’s easy to confuse riding a commodities wave to securing long term pockets of value-add growth.

“For that cooperative this level of competition should keep them on their toes, but it reinforces to me, the need for value-add to become a priority board focus.

“As it stands, Fonterra is being matched kg/MS for kg/MS by the other processors,” Mr Leferink concluded.


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