THE bidding war by south-west dairy companies to attract more milk suppliers has stepped up this season with Warrnambool Cheese and Butter (WCB) launching an advertising campaign.
The media blitz favourably compares WCB’s farmgate milk prices to those of other local milk processors.
South-west dairy farmers hope WCB’s aggressive efforts to get more milk supply this season will further boost their own payments after the dismal past season.
The advertisements build on the claim by recently retired WCB chairman Frank Davis that the company had paid the best price in the market for the past five years.
In its latest advertisement WCB gives its prices for protein and butterfat, under its flat supply incentive, that are clearly ahead of the other major south-west milk processors Murray Goulburn and Fonterra.
WCB milk supply general manager Anthony Cook said the flat supply incentive was offered to farmers who produced much the same volume of milk, or more than 45 per cent of their production, in the milk off-season from February to July, as they did during the peak season.
As part of its bid to get farmers to switch, WCB is also offering to cover any loss of loyalty payments to farmers from their previous buyer if they sign on this month.
The loss of loyalty payments on milk already supplied by farmers who switched processors has been a sore point with dairy action group Farmer Power, claiming it was a barrier to competition.
Farmer Power spokesman Jock O’Keefe welcomed WCB’s advertising campaign and loyalty payments offer, saying the increased competition for milk supply put farmers in a good position.
WCB is also offering to pay suppliers three times a month to help improve their cash flow.
WCB said it needed more milk to meet export and domestic demand for its products.
United Dairyfarmers Victoria president Kerry Callow said south-west dairy companies had been chasing more milk supply for the past two years and WCB had undertaken a more public way of doing it.
Ms Callow said milk supply from the region had dropped by three per cent during the past financial year, which was “reasonably good” in view of the adverse seasonal conditions.
The strong competition between dairy companies for milk indicated the good growth prospects for the dairy industry, she said.
Ms Callow said the loss of loyalty payments by farmers who switched processors had not been a big disincentive because there had been “ways and means” around such penalties in the past.