Bega warns of tough times in milk supply as drought hits farmers

29 August 2018

Brad Thompson, Australian Financial Review
29 August 2018

Bega Cheese has warned that increased pressure on dairy farmers as a result of drought and the rising cost of grain to feed their cattle will create intense competition for milk among processors.

Executive chairman Barry Irvin foreshadowed that Bega would have to pay more for milk supplies as a result of the dry conditions.

Bega was able to increase its milk supply by almost 100 million litres to 750 million litres in 2017-18 and said its fiscal 2019 procurement was up by another 115 million litres.

Mr Irvin said Bega had been successful in shoring up additional supply for the newly acquired Koroit dairy processing plant in western Victoria over and above the 300 million litres a year locked in until mid-2020 under the terms of the $250 million Saputo divestment of the plant.

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