DIRA Review: Open Country Dairy Warns Against Regulatory "Complacency"
The country's second largest milk processor is warning against 'complacency' during a review of competition regulations in the dairy sector.
Open Country Dairy suppliers are being paid $9.01/kgMS this month for milk supplied in October and November last year.
The Talleys-owned business pays its milk suppliers in full four times during the year.
OCD executive Steve Koekemoer says the company has "once again smashed our forecast and [I'm] pleased to announce that we will be settling the November period at a record $9.01/kgMS".
He describes the news as a great start to the New Year.
"To break the $9 barrier is exciting and a great reward for all our farmers' hard work on the farm."
Koekemoer says OCD's forecast for the balance of the season remains unchanged at this stage. For milk supplied in December last year and January this year, the company is forecasting a price range of $8.65 to $8.95/kgMS.
For the May period - milk supplied in February to May this year - it expects to pay suppliers between $8.60 and $9/kgMS.
Koekemoer says the dairy market is holding up well and his team continues to channel milk into the highest-returning products.
"The slight drop in milk volumes in the Waikato, due to climatic conditions, has allowed the business to use its flexibility and move more milk into cheese production." he says.
Cheese prices are currently at a record high. This, in conjunction with an upside in foreign exchange rates, has provided a good financial result, he adds.
With global supply not showing any signs of recovery, Koekemoer expects pricing to hold reasonably firm.
"We would see a slight softening if demnd dropped off, but no signs of weakening at this point."
Koekemoer says the Christmas period went smoothly for the company and milk was processed with very few hiccups.
"We are grateful for the long hours the teams put in over this period.
"Milk does not stop flowing and the machines need to keep churning our good product, which they did. Our supply chain team keeps shipping our products offshore well ahead of schedule.
"The business is in very good shape overall and I am very happy with our performance."
FEP Software
Open Country Dairy says the development of its new Farm Environment Plan (FEP) software is progressing well.
Chief executive Steve Koekemoer says this will be an exciting tool once it is rolled out later in the year.
"This new tool including training for all our farmer suppliers will be provided to farmers at no cost.
"Our objective is to make it as easy as possible for farmers to have a farm plan in place while aligning their business with future regulatory requirements.
"The FEP tool will be an ongoing investment to ensure everyone stays involved and is able to fulfil their environmental obligations in a simple way removing duplication of data capture and management."
