The Denison dairy farmer says there are several reasons he has remained with the co-operative, but he can see why other farmers moved.
“We are not talking $6 (a kilogram of milk solids) opposed to $5.85kg/MS; it is prices on the cusp of people’s ability to be able to service debt and feed cows,” Jon said.
“I don’t blame people for going into survival mode and grabbing a Fonterra, Saputo or ACM price at this time.”
Profit underpins decisions on the Ryan farm, but not far behind is his view Australia needs a strong co-operative to push farmgate milk prices.
This past season, supplying MG made financial sense for his 320-cow business. It received a growth incentive as it was a new farm supplying the co-operative. This made it competitive with Fonterra as an alternative processor.
The economics stacked up in MG’s favour, though, he said, “loyalty doesn’t pay the bills” and stressed MG must reflect fundamental market pricing and be competitive to retain their supply.
“We are feeling confident moving forward, not because of MG itself, but (market) fundamentals underlying milk prices are improving,” he said.
He and wife Lauren regularly questioned the farmgate milk price when they were part of a separate business supplying MG at Newry last season.
Dealing with the “overpayment” that led to the price crash, Jon was reflective.
“We were able to buy this farm and since have been able to buy two other properties. Our business wouldn’t be where it is now without the overpayment,” he said.
“At least MG didn’t pull the rug out from under our feet such as National Dairy Product suppliers and Fonterra suppliers experienced in the autumn,” he said.
Source: Weekly Times
Link: http://www.weeklytimesnow.com.au/agribusiness/dairy/murray-goulburn-finances-stacked-up-for-denisons-jon-ryan/news-story/2ab972f09d7b21f5f34bb5e8feecd2b0