Burra Foods is offering new and existing suppliers a 40 cents a kilogram payment at the start of the 2017/18 season if they sign a three-year supply contract.

Burra Foods chief executive officer, Grant Crothers, said that FY17 prices were unsustainable for the industry and positive signals were important for confidence.

“Our supply partners have told us the current milk price is unsustainable and they are extremely tight for cash,” he said.

“It has been two tough seasons – poor conditions in 2015/16 and a year of low prices in 2016/17 has been punishing.”

To be eligible, supply partners will need to sign a three-year supply agreement with Burra Foods and the 40 cents/kg is a prepayment of a commitment bonus for doing so.

There is no time limit to sign on and the offer is available to existing and new supply partners.

Mr Crothers said he believed it was an important step to promoting confidence for growth and investment on farm.

“In total, it is a $10 million commitment to our supply partners which is an investment in building a sustainable supply chain,” he said.

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