Bonlac Supply Company, whose 1500 members supply milk to Fonterra in Australia, says it will contact disgruntled MG suppliers in the coming months.
Bonlac chairman Tony Marwood says while it is too late to talk to new suppliers for the next season starting June 1, it will be talking to MG suppliers in June-July.
“Farmers show their allegiance to milk companies by supplying local factories; MG is closing three factories leaving some suppliers without a local factory,” he told Dairy News.
MG will start closing the Edith Creek site in Tasmania and Rochester and Keiwa sites in northern Victoria in August this year; about 360 employees will be laid off.
MG says the closures will improve the future processing footprint by an annualised net gain of A$40 million to $A50m. MG expects to spend A$60m to enable the closures.
Marwood says the whole Australian dairy industry is facing challenging times and last week’s MG announcement is causing “further upheaval”.
“This is the best place in Victoria to be in dairy,» Alpine Valleys Dairy Pathways Project committee chair Kergunyah, Vic, dairyfarmer Stuart Crosthwaite said.
«We have excellent soil, reliable rainfall and high-quality skills within the industry.
«This is a blow to our communities, but it isn’t the end of dairy in the North East.”
Asked if the Kiewa plant should be considered for dairy production beyond Murray Goulburn, Mr Crosthwaite said “why not?”.
“Over the past decade milk production in the Alpine valleys has lifted 26 per cent, in the same period across the Goulburn Valley irrigation district milk production has dropped 30 per cent,” he said.
“Manufacturing could be a great proposition due to the resilience and reliability of environmental conditions.”
Mr Crosthwaite said he also believed the Kiewa Valley had scope for more dairying.
He wants the industry to be central to national government policy like it is in New Zealand, where milk production has skyrocketed.
The farmer said the dairy sector needed to have the muscle that the mining industry had in Australia.
Tuesday’s Murray Goulburn announcement included the staged closure of the Kiewa site, to be complete by September 2018.
The shutdown will cost the region 135 jobs.
“There is no doubt that the impacts on families and communities will be significant,” Mr Crosthwaite said.
“The Alpine Valley’s Dairy Pathways committee will continue to work closely with our industry partners, including Murray Dairy, Dairy Australia and the council’s of Alpine, Indigo, Towong and the Rural City of Wangaratta, to link the community with response programs as more information is announced.”
The committee believed workers who lose their jobs would have scope for more employment from within the dairy industry, particularly if funding can be secured for strategic projects to support the industry to become more sustainable and profitable.
Murray Dairy deputy chair Karen Moroney, who farms at Eskdale, Vic, hoped the MG decision was a turning point for the industry.
“I think a lot of us have been in suspense for 12 months,” Ms Moroney said.
“There’s been not enough announcements from the company, there’s been so much turmoil and maybe this will give dairyfarmers the confidence.”
The Alpine Valleys Dairy Pathways committee had a proposal, which has been discussed with representatives of the Victorian and Federal Governments, to support the industry through transition.
The AVDPP sought to provide support to the industry including working with farmers to strengthen their enterprises and to consider diversification, develop opportunities for manufacturing as well as value adding and export opportunities.
“Our thoughts are with the workers and their families at what is a difficult time for our communities,” Mr Crosthwaite said.
“We hope that our work to grow and support the industry will help to develop new jobs and sustain a healthy industry in the future.”
MG also scrapped its plan to recover payments to farmers before retrospectively slashing its farm gate milk price 12 months ago.
Source: The Australian Dairy Farmer
Link: http://adf.farmonline.com.au/news/magazine/industry-news/general/ne-vic-dairy-industry-will-survive/2755173.aspx
