Dairy Farmers of Victoria Consortium in new deal

A GROUP of northern Victorian dairy farmers have developed an innovative way to achieve a better milk price and improve farm profitability.
Share on twitter
Share on facebook
Share on linkedin
Share on whatsapp
Share on email

Dean and Sarah Kendrick, John Bell and Dan Hoch established the Dairy Farmers of Victoria Consortium to represent dairy farmers across the state who are interested in developing different and innovative relationships with processors.
The ACCC inquiry along with the proposed mandatory code of conduct persuaded DFVC to explore other progressive ways of doing business for the benefit of both suppliers and processors.
DFVC engaged with like-minded farmers in the region who believed change in the model of milk supply to ­processors was necessary.
A co-founder of DFVC, Invergordon dairy farmer John Bell said improved farm profitability was needed but so was a change in the way the industry looked at milk prices and input costs.
“Margins are very small in dairy anyway, but even the most efficient dairy farmers find it hard to be profitable when milk prices are low, the season is tight, and there are high water and feed prices,” Mr Bell said.
To achieve their aim DFVC secured formal commitment from 28 dairy farmers and put out an invitation to tender; seeking interest from all processors in Victoria willing to purchase a guaranteed volume of milk from DFVC’s suppliers.
It was a competitive tendering process from a number of interested parties and following evaluation DFVC signed a purchase agreement with Parmalat, who were prepared to explore other types of relationships as opposed to the traditional supply agreement, which to date has been the dominant relationship, Mr Bell said
The price was confidential.
Mr Bell said the tender process was “transparent and fair” to all processors.
Another DFVC co-founder, Kyabram dairy farmer Dean Kendrick said “we’ve negotiated favourable terms and conditions” and it’s something they hoped to do for more farmers.
“It is hard to grow and be sustainable with the price of grain and water going up,” Mr Kendrick said
Co-founder, dairy farmer and consultant Dan Hoch, of Girgarre, said after the ACCC report came out farmers found collective bargaining was not going to be a “remedy for the lack of farm profitability in Northern Victoria”.
“So we’ve created something different,” Mr Hoch said.
“We all get the same milk price, and we are a company providing security for the milk volume and quality. So we are taking the risk away from the milk company.”
Mr Hoch said that meant DFVC was managing the transport, quality and security of volume rather than the other way around.
“They (the processor) are guaranteeing a price for a product,” he said.
“Normally we are price takers and there is uncertainty around that.”
DFVC plans to replicate the tender process in the near future to determine interest from other processors and outlets.
For further information, interested dairy farmers can email admin@dfvc.com.

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

Te puede interesar

Notas
Relacionadas