Farmers read mixed messages from announcement

Victorian dairy farmers have acknowledged Fonterra’s effort to forecast a closing milk price for next season (2017-18), noting it would assist in farm planning.

But while farmers lobbied extensively for milk processors to give early price indications, the United Dairyfarmers of Victoria raised concerns over the processor’s move not to reimburse farmers who switched processors, when it slashed the farm gate milk price from $5.60/kgMS down to $1.91/kgMS last season (2016-17).

“Fonterra has listened to industry and is taking steps to provide a more stable commercial environment for their farmers by providing an indicative forecasting for the season’s milk price,” UDV President Adam Jenkins said.

“However, this was an opportunity to draw a line in the sand and start rebuilding trust in the industry after the milk crisis, but nothing has been done to rectify the heartache caused to many farmers who bore the burden of management decisions last year (2016-17 season).”

Mr Jenkins said Fonterra’s refusal to compensate farmers who switched processors for financial reasons would make the dairy industry more inequitable.

“Farmers who were financially forced to leave their processors should not be forced to continue to bear the cost of processor actions, and serious questions must be answered about the fairness and equity of the treatment of those who have left through no fault of their own,” he said.

“They should be paid a fair price for the milk they delivered last year (2016-17 season) and all farmers who supplied should be paid no matter who they now supply.”

The UDV has been working to implement a code of conduct for the dairy industry in a bid to avoid a milk crisis from occurring again.

“Australian dairy farmers need to have a say in how our contracts and supplier agreements are determined and what is reasonable, and the code is integral to achieving that outcome,” he said.

“No one wants to see the milk crisis repeat itself, so it’s important we obtain clarity and simple clear pricing mechanisms in our future supply agreements and contracts.”