23 Sep 2015

Oceania Dairy sets minimum payout

8:13 am on 23 September 2015

South Canterbury-based milk processor Oceania Dairy has announced a guaranteed minimum milk payout of $4.50 per kilogram of milk solids this season.

Oceania Dairy, owned by China's largest dairy producer Yili, said the support package was designed to help its 63 farmer suppliers during the turbulence in global dairy markets.

The company's general manager Roger Usmar said offering a minimum guarantee price gave farmer suppliers more certainty around cash flows, budgets and planning.

Mr Usmar said with the recent announcement of a $400 million development on its Glenavy site, it was important to invest in Oceania Dairy suppliers.

"[We] tried to tailor a support package that we felt would actually support not only our suppliers, but sharemilkers too," he said.

"On that basis we elected to guarantee a minimum payment for the 2015 season of $4.50 per kilogram of milk solids.

"I wouldn't say it's been easy. The reality is we did explore a number of options but certainly we are increasingly moving into a value add manufacture, I mean we are doing base powder, infant formula powder, so that gives us some latitude."