OCD looks at new milk price model

In its October newsletter to suppliers, OCD chief executive Steve Koekemoer says while it has the “fixed milk price” option already available, a farm price model will be based on farm costs and guaranteed margin at farm level.

“This is still in its infancy and our milk supply team will be arranging workshops with farmers during the season to get feedback on how this could work effectively,” he says in the newsletter. The “farm price” model is another option that we would like to have available to those farmers interested in stability, he says.

“It gives the additional benefit of milk paid for in full on a monthly basis.”

Last season OCD paid its suppliers a final milk price of $6.06 - $6.10/kgMS. This puts the company just behind Fonterra, which paid $6.12/kgMS.

Koekemoer, who recently returned from a sales trip to Algeria, Australia and the EU, says customers value OCD as “a highly credible supplier”.

“Our continual drive for efficiency and quality is certainly noticed and has put us in a great position as the supplier of choice for many.

“We continue to forge strong relationships with key customers and widen our product offering which is cementing our position long-term in key markets. Our sales team continues to do an outstanding job to ensure we have a balanced supply across the globe.”

2016-17 final milk payouts

1. Tatua $7.10/kgMS

2. Synlait $6.30/kgMS average

3. Miraka $6.23/kgMS

4. Fonterra $6.12/kgMS (plus 40c/share dividend)

5. Open Country Dairy $6.06/kgMS to $6.10/kgMS

6. Westland $5.18/kgMS.