Gippsland dairy farmer Bruce Manintveld rues the day that Australia’s biggest dairy processor and farmer-owned co-operative Murray Goulburn “cocked up” in 2015-16.
Back then, the dominant $3 billion company was buying and processing one-third of all milk produced in Australia and its 2600 farmer-owners — including Mr Manintveld — were being told to look forward to an even brighter future through booming sales of powdered milk, butter and cheese to China.
Two years is a long time in the dairy industry. Last week, the Murray Goulburn tanker picked up milk from the Manintvelds’ small Devondale-badged dairy on the green hills of Mirboo North for the last time in 35 years, after the co-op’s financial collapse.
The next day, May 1, the same truck was owned and operated by MG’s new Canadian owner, the Saputo Corporation, and the Leongatha processing factory that takes the Manintvelds’ milk was no longer a farmer-owned facility.
For Mr Manintveld and his wife, Fiona, while not much practically changed last week, there is a different feeling in the clear air of the Strzelecki Ranges. “I’m not a very emotional person — it’s just business — but this is the end of an era for me after 13 years with MG, ” Mr Manintveld said as he gathered his 320 Jersey cows for their evening milking.
“I think because it was a co-operative there was less profit-taking and more went back to the farmer in higher milk prices; I’ve always had a degree of loyalty to the idea of farmer co-ops.”
Since its 1600 remaining farmer-owners voted last month to sell the embattled co-op to Saputo for $1.3bn, every member will be paid 80c for their co-op milking or “wet” shares, nominally valued at $1, on May 15, with 20c-40c a share to follow in a year or two.
On the same day, the Manintvelds will receive a bonus MG loyalty back-payment of 40c/kg of milk solids for the 1.4 million litres of creamy milk they supply every year, boosting their milk price for the 2017-18 year to a welcome $5.60/kg (about 44c a litre).
The Manintvelds will use the extra income to pay down debt on the 115ha farm they bought in 2013. “We just don’t know what comes next; I’m extremely concerned about the future of the dairy industry without a co-op to be the benchmark so all we can do is hope the (dairy processing corporations) play nice in the sandpit,” Mr Manintveld says.
Murray Goulburn traditionally paid its mainly Victorian, southern NSW and South Australian farmers some of the best milk prices in southern Australia, which underpinned the base farmgate price paid by processors.
Fish Creek dairy farmer and blogger Marian McDonald worries that once the milk shortage is over and Murray Goulburn is all but forgotten, processors will jointly flex their muscle to push a moderate milk price even lower.
“(We have now) entered the wild west of farmgate milk pricing with something of a Mexican stand-off; effectively the two largest processors, Saputo-MG and Fonterra are promising that when it comes to farmgate pricing, they will match or beat themselves and each other; what a mess,” she blogged last week.
By: Sue Neales
Source: The Australian