Saputo chief executive Lino Saputo Jr told a group of major investors that its Australian arm, WCB, was determined to stand by its milk suppliers in times of volatile global milk prices.
WCB was one of four major dairy companies, with Bega Cheese, Burra Foods and Parmalat, that did not join Australia’s two biggest milk processors, Murray Goulburn and Fonterra, in slashing prices paid to dairy farmers without warning in late April, savagely backdated to mid-2015.
Instead, WCB committed to continue to pay its dedicated suppliers the opening 2015-16 milk price of about 43c a litre ($5.60 a kilogram milk solids) through until the end of June.
All dairy processors are expected to start announcing their opening milk prices for the 2016-17 season in the next fortnight, with fears the average price could be set as low as 35c per litre, less than the cost of production for most Victorian and Tasmanian farmers.
Mr Saputo told investors he expected to pick up some additional milk supply from unhappy Murray Goulburn and Fonterra farmers looking to switch processors, rather than be saddled with claimed overpayment debts for the next three years from their former milk companies. WCB is Australia’s fourth biggest dairy processing company, producing brands such as Sungold milk, Western Star butter and Coon cheese.
“When we went to Australia, we made some commitments to the dairy farmers, and I think we’ve lived up to every single one of those commitments,” he said.
“We talked about promoting from within, developing the business as much as we can develop it (and) mentioned that if there was (extra) milk available, we would invest in the infrastructure.”
But Mr Saputo said he would not be making false promises to disgruntled MG dairy farmers about price guarantees for the tough year ahead.
“There might be others out there making promises that they can’t live up to — that’s not the game that we want to play,” he said.
Source: TheAustralian