Open Country unveils major expansion plan
Confirming its "immense faith" in the dairy industry, the country's second largest milk processor is embarking on a significant investment programme.
Open Country Dairy has announced a milk price of $8.41/kgMS for June to September supply. This payment, going into farmers' bank accounts this month, matches the previous record milk price set in 2013-14 season.
For the October to November period, Open Country has announced a forecast milk price range of $8.45 to $8.75/kgMS.
"I am confident at this point that we will deliver within this range, which will mark a new payout record," says chief executive Steve Koekemoer.
Dairy prices have continued to strengthened in recent months.
Whole milk powder prices rose 2.7% in the last Global Dairy Trade auction, its fourth increase in the last five auctions. The jump in prices builds on gains over September and October.
Overall, WMP prices have lifted 10% since August and sit 30% or more above year ago levels.
Cheese was the biggest winner in the last auction, jumping 14%.
Koekemoer says buyers outside of China have resumed their activity, providing support and confidence at current pricing levels.
"The timing has been suitable as New Zealand moves through the peak of our milk production and I expect this trend to continue in the short term at least."
He says the standout from the last GDT auction was the 14.1% jump in cheddar prices, which is in line with Open Country's production mix at this time of the year.
Koekemoer says the prospect of a new record milk price will be welcome news for farmers in a challenging year.
"With all the disruption through Covid and having to cancel our annual Christmas functions for the first time in our company's history, I am sure this is a welcome gift for all our farmers."
He points out that Open Country has also increased the settlement periods further out "a bit more consecutively" but will continue to assess closer to the time.
Open Country supplirs receive full payment for milk in four instalments during the season.
Another Record
Open Country Dairy is also on track to break its monthly shipping record this month - despite disruptions in the supply chain.
Chief executive Steve Koekemoer says the business did plan extremely well to minimise any risks and it has paid off in spades.
"It is not easy and a daily grind for our supply chain and logistics teams to keep things on track but the whole Open Country team is committed, working as hard as they can to ensure we deliver the results that you have come to expect."
He also gave an update on Covid vaccinations within the company. Some 88% of the company's staff are fully vaccinated and it expects to pass the 90% milestone within the next week.
"It has been a great effort across all sites as we look to protect our people, their families and the company."
