icon
June 15, 2020 >

Lion Dairy & Drinks announces competitive minimum pricing for the 2020/21 milk season

UPDATED: 15 June 2020

Lion Dairy & Drinks has announced its minimum pricing for its direct milk suppliers across key Australian dairying regions for the 2020/2021 milk season. This pricing is applicable from 1 July 2020 to 31 August 2021.

In line with the requirements of the new mandatory Dairy Code, which came into play on 1 January 2020, Lion Dairy & Drinks has released all of its contracts for each dairy region on its website and is offering both exclusive and non-exclusive supply agreements for the 2020/2021 milk season.

Murray Jeffrey, Agricultural Procurement Director for Lion Dairy & Drinks, said the publication of regional- specific contracts and pricing on Lion Dairy & Drinks website was designed to provide transparency to farmers.

He said Lion Dairy & Drinks was very mindful of the impact COVID-19 had on southern milk pricing, together with the impact that drought has had on many farms in New South Wales, South East Queensland and Northern Victoria over the past 18-months and was sympathetic to the impact this was having on higher feed costs and farm profitability.

Murray said Lion Dairy & Drinks was committed to working with all its dairy suppliers on mutually beneficial partnerships and programs – this included continuing to facilitate its unique sustainability program, Lion Dairy Pride. The program launched in 2017 and is designed to help our dairy suppliers be more sustainable across five key areas of the dairy farm business system: milk quality, animal welfare, people, community and wellbeing, the environment and business management. The program offers easy access to useful tools and templates, as well as links to external resources.

“Our minimum pricing for the FY2020/2021 milk season is a sign of our confidence in the Australian dairy industry, and in our growth strategy,” Murray said. “Our purpose-led vision is to deliver sustainable, enjoyable nutrition to help people live well and our strategy will see us continue to focus on driving profitability in key dairy categories with our premium dairy brands and market-leading innovation.”

Murray said Lion Dairy & Drinks had proven to be the natural partner for dairy farmers who wanted to focus on growing value through nutritious, branded dairy products that delivered competitive returns and a sustainable future for the industry.

“We are focused on driving profitable growth in milk based beverages, white milk and yoghurt as well as for the benefit of our farmer partners, customers, network partners, consumers and other stakeholders,” he said.

“Our approach to milk procurement for many years has been based on offering farmers, what we call the ‘3 P’s’: competitive pricing and contract terms, partnerships and a clear purpose and strategy built around growing profitable demand for dairy and ensuring sustainable returns through the supply chain.

“We are working hard to deliver compelling pricing underpinned by our focus on driving sustainable value back into the industry. Lion Dairy & Drinks is committed to working with all its dairy suppliers on mutually beneficial partnerships and programs.”

There are around 280 dairy farms supplying the Lion Dairy & Drinks business across Australia – this includes direct Lion Dairy & Drinks suppliers and suppliers through the Dairy Farmers Milk Co-Operative (DFMC).

To learn more about our FY2020/21 milk season minimum pricing and Dairy Code Farm Gate Agreements click here: https://dairysuppliers.lionco.com/dairycodecontracts/

Lion Dairy & Drinks’ Weighted Average Pricing for exclusive contracts for the 2020/2021 Milk Season (effective 1 July 2020)

The following table sets out the Lion Dairy & Drinks weighted average milk price based on our current milk supply in the dairy regions described below at our exclusive pricing.

Please note: the prices reflected below are not our minimum price. For details on our minimum pricing please refer to our website: https://dairysuppliers.lionco.com/dairycodecontracts/

Dairy Region

Exclusive
Weighted average milk price (kgs/MS)

Victoria*

$6.52 kg/MS 1 yr. fixed price

Tasmania*

$6.94 kg/MS 1 yr. fixed price

South Australia*

$6.88 kg/MS 1 yr. fixed price

Western Australia

52.5cpl

South East Queensland

65.6cpl

New South Wales

60.4cpl

* For Victoria, Tasmania and South Australia-Mt Gambier, Lion Dairy & Drinks is offering market variable and fixed pricing options. The table above reflects the fixed prices being offered.

On Monday 15 June 2020, Lion Dairy & Drinks also announced that in Victoria it is offering:

  • an Early Sign On Bonus for farmers who choose Fixed Pricing and sign up before 30 June 2020
  • and a Step Up in its Market Price effective from 1 July 2020.

The Early Sign On Bonus gives farmers on Fixed Pricing contracts an additional $0.23/kg fat and $0.34/kg protein for all milk supplied between 1 July 2020 to 30 June 2021.

For farmers on Market Pricing contracts this Step Up will provide an additional $0.23/kg fat and $0.34/kg protein effective from 1 July 2020 until 30 June 2021.

“Since the release of our pricing on 1 June, we have listened to feedback from farmers in Victoria and considered the competitive market dynamics this year. To ensure that we remain competitive and can source the milk we need for the coming year we are offering an Early Sign-On Bonus for Fixed Pricing and a Step Up to our Market Pricing,” Murray said.