The chair of the independent milk supplier, the Australian Dairy Farmers Corporation, has agreed with claims milk pricing structures are too complicated.
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TRANSPARENT PRICE: Australian Dairy Farmers Corporation chair Scott Seiben says the company seeks to offer a competitive price that is very transparent and easy to understand.

ADFC chair Scott Sieben said he “absolutely” agreed with Burra Foods chief executive Stewart Carson too many processors released average weighted milk prices that were unrealistic.

“The Mandatory Code hasn’t really helped the dairy industry be transparent, because as Stewart says companies quote a headline price that we know isn’t right,” Mr Sieben said.

“All they are doing is trying to confuse the farmer.”

Mr Seiben also took aim at what he said were “special deals.”

“No-one really knows about them and 99 per cent of the time, when you get to the end of the year, it’s not really a special deal,” he said.

“They (the processors) convince the farmer it looks great, but you have to sign for two or more years and there’s all this hype.

“And there’s no need for it.”

Mr Sieben said ADFC had a six and six model, which paid $7.00/kilogram MS for July to December and $7.50/kg MS from January to June (opening milk price).

“The only thing that comes out are the Dairy Australia and Dairy Foods Safety Victoria levies, so it’s a very simple model,” he said

“There are no pick-up charges, stop charges or volume charges.

“The price is the price – whether you are big or small, everybody gets treated equally.”

He also criticised separate payments for northern and southern Victoria.

“Why would I say to a Gippsland farmer I’m going to give you less than a northern farmer, because you are in a different region?,” he said.

“We are a supply co-operative; whatever money we make through the co-operative, we pay back to the farmer.”

ADFC, founded in 2012, was currently picking up 275 million litres of milk from 160 farms in Gippsland, northern and south-west Victoria

It supplies niche export and domestic companies across Victoria, NSW and Queensland.

Mr Sieben said two years ago, ADFC was picking up close to four hundred million litres of milk, and was aiming to recruit additional milk supply this coming season.

“The main reason supply dropped away was because of the opening price we came out with, last year,” he said.

“Opening price is very important to farmers.”

That opening price was not seen as being as competitive as those offered by other processors and suppliers.

“This current season ADFC are not at the top, and we are not at the bottom,” Mr Sieben said.

“But what we aim to achieve is a competitive price that is very transparent and easy to understand.”

He said ADFC was not about picking up from every farmer.

“We don’t drive down every farmers driveway, we would rather people inquire of us, and we can run their numbers to see if they suit what we are looking for.”

Processors Bega, Fonterra and Saputo Dairy Australia have been contacted for comment.

Victorian scientists in Australia will be working on methods to reduce the environmental footprint of the Australian dairy cow and to create a more profitable and sustainable dairy sector.

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