It is five years since Australia's largest milk company, Murray Goulburn cut the price it paid farmers for their milk, in an announcement that has shaped the industry since.
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Victorian dairy farmers are enjoying a bumper year but the hurt caused by the dairy crisis five years ago is not forgotten.(By ABC Rural: Jess Davis )

Key points:
It is five years since the Murray Goulburn milk company slashed the price it paid to farmers for their milk
The dairy crisis sent shockwaves through the industry, as farmers were paid less the cost of production
Five years on, Victorian dairy farmers are enjoying ‘their best season ever’

On April 27, 2016 the company announced to the Australian Stock Exchange, that it was immediately and retrospectively cutting milk prices sparking what became known as the “dairy crisis”.

It was also announced that the company’s managing director, Gary Helou was leaving – despite being touted as the man who would usher the former cooperative into a new era of growth and expansion.

Farmers, like Di Bowles from Mead near Cohuna in Northern Victoria, were left reeling from the news that Murray Goulburn would now be paying farmers well below the cost of production.

Ms Bowles who spoke to the Victorian Country Hour on this day five years ago said that today’s anniversary brought the memories back to the surface.

“Some of the pain and hurt will never go, never,” Ms Bowles said.

“At the time of the price crash, we had just bought the neighbour’s farm and we were looking at full expansion and I just remember I was just gutted, we were doing everything the industry wanted us to do, milk more cows, buy more land and it felt like the rug was being pulled out from under us.”

“And on the actual day, it felt like there was nowhere to go, that we were stuffed really.”

Ms Bowles said at the time, she was genuinely worried about whether she and her husband would get through the season.

“We hadn’t signed the contract for the neighbour’s farm and to be honest, the guy we bought it off, offered for us to pull out, because my husband was so depressed, but we decided we would do it, and I remember after we left the solicitor’s office I took a photo of my husband Gary who looked terrible and I said we will look back on this photo in time and think this was the best decision or the worst, and it was the best.”

Lessons learnt

Gary and Di Bowles are now milking more cows than they were in 2016 and their production is higher.

“It did define us, but I think it made us stronger,”

“I’ve got much, much better at budgeting in a conservative way, I will never, ever put in a step-up pay rise in my budget, I will just budget on what the milk estimate is,” Ms Bowles said.

She said she hopes processors have learnt from some of Murray Goulburn’s mistakes.

“You need to be honest with people about what’s going on. When it first happened we just got dribs and drabs of information,”

“I would have wanted to know the whole, bad truth all at once.”

Crash sparked mass exodus

Dairy farmer Andrew Wilson supplied Murray Goulburn at the time of the milk price crash and is still milking cows today, at Strathmerton in northern Victoria.

He said in the months after the price crash, work was tough.

“It was quite a few months there where you were working away and not gaining any financial advantage,”

He said he managed to ‘hang in there’ by standing down workers and reducing his herd but said the dairy crisis and changes to water policy led to a mass exodus in the Victorian dairy industry.

” When I moved here 11 years ago there were 13 dairy lights on when I got up in the morning, now there’s one, so it’s a sad state of affairs really,” Mr Wilson said.

“The trust is gone”

Award-winning Victorian journalist and dairy writer, Simone Smith covered the dairy crisis and agrees, it led to a shrinking of the industry.

“And the context is, Murray Goulburn were out there blowing their bags saying everything was amazing…Phil Tracey the former Murray Goulburn chairman was talking about the benefits of value-added at the Australian Dairy conference earlier that year, there were profit-sharing mechanism talks, there was the partial listing, people buying into the cooperative, this was going to be the biggest thing ever,”

“And there was a hashtag at the time trending – #605keepthedreamalive – because there was the promise that the milk price would go up and all around the world the milk price wasn’t going up, it was going the opposite way yet we had Murray Goulburn saying ‘we can keep this price, rest assured this will be OK’ ”

“So people felt deceived on every level and it was horrible really.”

“The trust is gone, yes people like milking cows, people love the industry… but they are more inclined to swap milk processors than they ever were before,”

” People used to milk their whole lives supplying the one processor, that doesn’t happen now.”

Still love milking cows

Di and Gary Bowles still love milking cows and still love being dairy farmers but Ms Bowles said they made a pact that if that ever changed, they would sell.

And they are grateful they were able to hang on during the lows of 2016/17 because like many farmers across Victoria, the Bowles are now enjoying a record season.

“This is the best year we have had, the last 12 months have been phenomenal,”

“I don’t think you would find an unhappy dairyfarmer in Northern Victoria…it’s just been a ripper,” Ms Bowles said.

Last month, 14 of our dairy farms in Maine, as well as dozens of dairy farms across northern New England, got an unexpected and disappointing notice from Danone of North America saying that they were discontinuing their contracts with our organic dairy farmers in Maine, New Hampshire, Vermont and elsewhere.

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