Macarthur dairy farmer Craig Dettling has urged south-west dairy farmers supplying Murray Goulburn (MG) to stay with the processor if they could afford to do so.
With MG’s opening milk price for the 2017-2018 milk season of $4.70 a kilogram milk solids (kgms) falling well behind that of other processors, there has been increasing speculation many MG suppliers will swap to other processors.
Fonterra, which is offering an opening price of $5.30 kgms plus a loyalty payment of 40c kgms, said it was “getting strong interest from prospective suppliers and the West Region team is working its way through those enquiries at present.”
Mr Dettling said that without the MG cooperative in the dairy industry, other dairy processors would “minimise milk prices to maximise their profits.”
He said MG was being “responsible” with its milk price and “cannot pay more than it can earn.”
“It has not got a parent company with an overseas balance sheet to prop up its milk price,” he said, referring to the overseas-based Fonterra and Warrnambool Cheese and Butter (WCB) dairy companies.
Fonterra is aiming to build up its milk supply for its upgraded cheese plant at Stanhope in northern Victoria while WCB has also said it is seeking more milk for its Allansford plant.
Another MG supplier, John Tindall, of Carapook, near Coleraine, had a different view, saying the cooperative’s low price this season would “probably” mean he switched to another processor.
Mr Tindall, whose family has been supplying MG and a dairy company it took over for about 60 years, said it was “pointless” for him to keep supplying MG when other processors were offering more money.
He said MG had told a suppliers meeting on Monday that its price was based of what it believed the market could deliver.
“We got a logical and plausible explanation (for the price),” Mr Tindall said.
“But if other companies can do it (pay more money), that is their perogative.
“And if they are prepared to pay more, I will take it,” Mr Tindall said.
He said WCB and the South-Australian-based Beston Global Foods were among his options for future buyers of his milk.
His sizable milk production from his 650 cow herd of five million litres a year and autumn calving, which meant he was producing milk when companies were particularly keen to get it, make his operation attractive to processors, he said.
“I think MG still has a good future and I hope for the industry’s sake they pull it off,” Mr Tindall said.
Source: The Standard