Farmers make the switch from Murray Goulburn to Fonterra amid price crisis

A number of dairy farmers across the state have been switching their supplier contracts from Murray Goulburn as the crisis over spiralling farmgate milk prices continues. By Caitlin Jarvis
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Farmers who formerly supplied to Murray Goulburn have been inquiring and switching accounts to Tasmania’s largest milk processor Fonterra.
Frustration among Murray Goulburn’s farm supply line has peaked with a rally held at one of the company’s quarterly suppliers meetings, held at Smithton last week.
Murray Goulburn supplier Mark Mcintyre, said there were some emotional farmers at the meeting.
“There was a lot of questions about how we got into this situation, with the payback, and why the season has gone so badly,” he said.
“People wanted to know why they weren’t being paid…”
Because each contract is different, each farmer will be paid a different price at the farmgate, despite Murray Goulburn and Fonterra posting average opening season prices of $4.31kgMS and $4.75kg/MS respectively.
Fonterra general manager of milk supply Matt Watt said the company had been surprised at the level of inquiry it had received from farmers wishing to switch.
”Suppliers are obviously considering their supply options for the new season and our opening price position will obviously be quite attractive,” he said.
“We are currently working through what additional volume we can take, given our assets and markets going forward.”
Farmgate milk prices have dropped sharply twice in 2016, with the first cut announced in April for the last two months of the 2015-16 season and the second announced in June, as opening prices for the 2016-17 season.
For autumn milkers, the May and June prices were cut to about $1.91kgMS for suppliers to Fonterra, with Murray Goulburn paying its farmers an average of between $4.75 and $5.
However, farmers were dealt another bitter blow at the end of June, when the two big processors posted their opening milk prices for the upcoming 16-17 season, that began on July 1. Price setter Murray Goulburn posted its milk price first, with an opening price of $4.31kgMS with a forecast price to reach $4.80kgMS over the course of the season. The $4.31kgMS price is after the application of the Milk Supply Support Package repayment.
Mr Mcintyre said he would be remaining with Murray Goulburn because he bought shares in the company when he started his contract.
He said if he wasn’t locked in by the shares he would have considered going to Fonterra.
“You can’t have that loyalty, it’s just business, I’d be saving $30-40,000,” he said.
However Mr Mcintyre defended the company’s actions, saying he didn’t believe it had set out to undermine its suppliers.
“I don’t think they even know how we got here, they are doing what they can to get back on track.”
A Murray Goulburn spokesperson said while it was always sad to see suppliers go it was ultimately a matter for them to decide.
“There has been a loss of milk in recent weeks due to suppliers moving to other processors or retiring from the industry. This represents approximately 3.6 per cent of our total milk supply and is within the range we expected. We will continue to closely monitor the supply situation over the coming weeks,” the spokesperson said.
 
Source: TheAvdocate
Link: http://www.theadvocate.com.au/story/4075309/dairy-farmers-switch-contracts/
 

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.

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