MILK processor loyalty is set to be sorely tested in the coming months as dairy farmers attempt to cash in on better farmgate prices.
The new appetite to negotiate with different milk companies comes as most processors have confirmed opening prices for the new season, which begins on Sunday.
Some processors have superseded previous opening prices as the race to secure milk heats up. Colac’s Bulla Dairy Foods has gone as far as venturing into Gippsland for the first time to shore up supplies.
But many farmers are not happy with current offerings.
Katamatite dairy farmer Erwin Van Den Berg said processors had been phoning him regularly wanting milk.
He said he had been negotiating with a few and knew many farmers in the same situation. He was also critical of “games played” by processors, such as sign-up bonuses and said he envisaged farmers swapping processors annually.
Mr Van Den Berg, who supplies Parmalat, which unveiled an opening price of $5.90/kg of milk solids last week, said the price determined where he sent milk. He said he needed “mid sixes-plus (/kg of MS)”.
Former Murray Goulburn supplier Barry Bruce, of Kongorong in South Australia, said he was furious with the $5.75/kg of MS opening price from new owner Saputo last week.
United Dairyfarmers of Victoria president Adam Jenkins said he did not necessarily believe there would be an exodus of farmers to different processors, but that many were looking at their options.
Australian Consolidated Milk lifted its opening by 1.7 per cent to $6/kg on Monday. This comes after Bulla Dairy Foods lifted its opening by 20c/kg earlier this month. Bulla general manager Rohan Davies said its recruitment had gone well with some “opportunity left in southwest Victoria”.
By: SIMONE SMITH
Source: The Weekly Times