COLES has signed the last of its 10 Western Australian dairy farmer milk suppliers to a three-year direct supply agreement.
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On January 1, Busselton dairy farmer Ruth McGregor announced on Twitter that her three-year direct supply “contract” with Coles had started.

On Tuesday a Coles spokesman confirmed Ms McGregor was the last of the 10 dairy farmers accepted as direct suppliers to Coles.

She and another farmer had to wait until their previous supply agreements with processors expired before they could sign up with Coles, while another eight suppliers were signed up last October, the spokesman said.

“Ruth is one of the 10 Western Australian dairy farmers with whom Coles has signed direct sourcing agreements for our Coles brand fresh milk sold in the State,” the spokesman said.

“Coles began collecting milk from other directly-contracted WA dairy farmers in October, however Ruth’s contract commenced on January 1 following the expiry of her previous supply agreement.

“We welcome Ruth on board and look forward to her contribution to the Coles Sustainable Dairy Development Group,” he said.

As previously reported in Farm Weekly, Coles expects to buy 35 million litres of milk a year direct from its 10 WA dairy farmer suppliers.

Since October 1 its direct-purchased milk has been processed and packaged under a toll arrangement at Bentley by Lion Dairy & Drinks as Coles’ brand milks for its supermarkets.

Direct-purchased milk is also processed and packaged under a similar toll arrangement with Brownes Dairy at Balcatta for Coles brand milk products sold through Coles Express petrol and convenience sites.

For the previous five years Lion Dairy & Drinks had processed and packaged some of the milk it bought off WA dairy farmers as Coles brand milks under what was then the largest dairy processing contract in WA.

Coles called for expressions of interest in supplying it directly in June and offered one, two and three-year milk supply agreement options, but its 10 suppliers all opted for three-year agreements.

Its published minimum seasonal milk price in WA is based on rates of $6 per kilogram for butterfat September-December and $7.40/kg for the rest of the year and $7.50/kg for protein September-December and $9.20/kg for the rest of the year.

China’s dairy imports have slowed amid rolling Covid lockdowns and a weakening economy that has many analysts slashing their 2022 and 2023 economic growth estimates for the country.

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