WHILE the Coalition promised to invest $2 million in the creation of a transparent milk pricing index, Steve Spencer says it already exists.
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The global dairy market analyst said the “industry first” platform could be “up and running in a month” if approved.
“The government said they would invest in a platform,” Mr Spencer said. “What I’m saying is that’s what we have.”
A forward view of the market price would mean business owners and farmers could track global milk price changes and make informed financial decisions up to two-seasons in advance.
“The events of the past few months have shown a gaping hole in the information reaching Australian dairy farmers,” Mr Spencer said.
“Projected 2016/17 milk prices seemed to come out largely as a shock... frankly… that isn’t good enough.
“While all the focus was on the major (cuts of last season)… signals about expected future prices got lost.”
Mr Spencer said with the forecasting information that was available globally, farmers deserved better certainty than they currently received.
“We’re translating what we see on a global scale and showing how it will impact forward prices,” Mr Spencer said.
“We can cut through the noise, find what’s important and translate that back to the farmgate.
“Farmers can make decisions based on the risks they can see.”
The Freshagenda director was earlier in July invited to the United Dairyfarmers of Victoria annual meeting to present the platform and discuss its potential in the south-west dairy farming community.
Mr Spencer said the index would also show the impacts and returns of specific products on the global and domestic market (milk, cheese, butter) which would give an indication of what “companies could afford to pay”.
“It’s always going to be moving and it will constantly change but farmers will be able to see it,” he said.
UDV president Adam Jenkins said farmers were often too busy to “go everywhere” to “work out” the global price and said the platform was a “good idea”.
He said other industries were able to forecast their prices – something dairy was not very good at.
“Looking back, the wallop of a bad year could have been tapered down a bit,” he said.
“Could (the index) have avoided the price cuts? Maybe not… but we could have had a softer landing.
“From a milk price to change from $6 to $4.30 is a hell of a step-down.”
Mr Jenkins said it was an exciting avenue to pursue.
“This is the first step in a lot of conversations,” he said.
“At last we would understand the trends at hand.”
Mr Jenkins said the UDV had discussed the potential product with the Federal Government with Wannon Member Dan Tehan “excited to take it on board”.