Veresdale Scrub, Qld, farmer Brad Teese says the Dairy Code of Conduct released on January 1 was supposed to create a fairer system for farmers to negotiate a workable price for their milk.
As the only dairy farmer in the region who refused to sign a deal with Lactalis before January 1 when the code’s new rules came into play, Mr Teese continued discussions with the French-owned company.
He said that after three months of talks, Lactalis withdrew all offers.
Mr Teese said Lactalis had offered incentives to local farmers who signed contracts in December.
The Dairy Code of Conduct does not apply to contracts signed before January 1.
Mr Teese said the code stipulated that processors must offer supply agreements as well as exclusive contracts and publish their prices at the end of each financial year, with contract renewal due on July 1.
This would give farmers the opportunity to shop around for the best deal.
He said despite a long family history of supplying Pauls, which was later acquired by Parmalat and then Lactalis, the final offer from the processor was impossible to accept.
The offer was less than 42 cents per litre under a dual-supply contract, compared with the average cost of producing a litre of milk being 72 cents.
“With that price I would have had to charge 93 cents to other customers to make up the difference,” he said.
Lactalis was contacted by the Beaudesert Times by phone and email but declined to comment.
Two other Scenic Rim dairy farmers said they also delayed signing with Lactalis. One of these was Christmas Creek, Qld, farmer Anthony Sellars.
“We were supposed to sign by December 12 to get a cash incentive but we didn’t want to sign,” Mr Sellars said.
“They called again on December 20 and we said we would sign only if we were guaranteed complete coverage under the Code of Conduct. We were promised that would be the case.
“We also wanted back pay … and I did get that. The money is not the issue but now they are saying the contracts do not expire until December 31.”
He said this would prevent him from a potential benefit of contracts renewed on July 1 under the code.
He said a Lactalis representative had said he was “in the one per cent of farmers who just want to cause trouble”.