Dairy company Bonlac Foods Limited today (Thursday) announced an opening milk price for 2005/06 that is a 13% increase on last year's opening price.

BFL chairman Noel Campbell said that the company's opening price for the new season provided a clear signal to suppliers.

"This strong start to the season for BFL was made possible by continuing strong demand and firm commodity prices. We believe that it will encourage the growth of the company's existing milk supply base as well as new supply," he said.

"Fonterra is also assisting the BFL business in many ways and this is resulting in strong and sustainable returns on farm for supplier," he said. "There is confidence in the business and confidence in dairy overall in the regions. Recent good rains in most dairying regions and the grain belt will result in probable strong supplies of supplementary feed during the new season, which is a good start."

"Looking ahead to 2005/06 our intention is to maximise returns on farm through innovation and clarity of signal," he said.

With respect to the current season's pricing, the BFL Board will be announcing the final price for 2004/05 once the fourth quarter results have been finalised, and this should be in the next week to 10 days, the company said.