Dairy prices take centre stage

Uncertain supply agreements and a lack of transparency around milk prices dominated a dairy farmer forum at Traralgon on Tuesday.

The Australian Competition and Consumer Commission hearing followed from last year’s dairy farmer crisis which impacted Gippsland farmers and beyond.

ACCC commissioner Mick Keogh said the most immediate difference Gippsland dairy farmers faced was the lack of fixed contracts and supply agreements in comparison with other regions and farmers across Australia.

“The lack of clarity around pricing (is surprising),” Mr Keogh said.

“A lot of the commentary we had was around the lack of transparency around pricing and the difficulty in understanding exactly what price was being offered and in fact when you were going to be paid that price.”

Mr Keogh said another concern for dairy farmers was the clawback by cooperatives such as Fonterra and Murray Goulburn in the middle of last year.

United Dairyfarmers of Victoria manager Vin Delahunty said farmers were genuinely concerned about the complexity of milk price structures, citing the confusing structure often left farmers scratching their heads.

“I guess what people are looking for is transparency, equity and fairness in milk price structures and the core of the issue today was the milk supply agreements,” he said.

“Farmers are looking for companies to be held accountable, so those companies principally Fonterra and Murray Goulburn, will be asked to account for their actions by the regulators and that’s a good thing.”

Mr Delahunty said farmers were also concerned around the timeliness of milk prices and how those prices were not announced until after farmers had started to deliver for the new season – before they had a fixed price agreement.

‘Gippsland Jersey’ directors Sallie Jones and Steve Ronalds established their independent milk brand with the dairy farmer crisis as one of the motivating factors, citing their concerns over a lack of independently produced milk in Gippsland.

They said they began processing their own in-house milk last September and since then the brand had received incredible support from local consumers and it was clear from the forum that the supermarkets were ruling the industry.

“We did get a phone call from Woolworths two weeks after we launched our brand (last year) who said they would happily stock our milk in 48 stores throughout this region, however we did decline that offer,” Ms Jones said.

“(Our milk) is in a lot of independent supermarkets; it means people are shopping at smaller retailers because that’s where our milk is available and as a result are contributing to the economic growth to those local businesses.”

The ACCC will hold forums later this month in Warrnambool and Shepparton as part of the inquiry.