Murray Goulburn (MG) supplier Craig Dettling of Macarthur is asking fellow MG suppliers to take a long term view rather than join the rush away from the dairy cooperative.
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Mr Dettling was commenting on the 15 per cent drop in milk supply that MG expects to incur this season after farmers switched their supply following the cooperative’s big cuts to its farmgate milk price last season.
Mr Dettling said the current tough situation for dairy farmers in Western Australia and Queensland highlighted what could happen when there was not a dairy cooperative with a large presence in the market.
Some WA dairy farmers have struggled to find buyers for their milk while poor milk prices in Queensland have prompted several dairy farmers to leave the industry.
Mr Dettling, who said he was giving a personal opinion, said history had shown that dairy producing area throughout the world that did not have a cooperative had been “left with farmers who have been at the mercy of proprietary companies.”
Proprietary dairy companies had shown no evidence they would give more in the milk prices they paid to farmers than they had to, he said.
Dairy cooperatives, in contrast, aimed to maximise returns for farmers at the farmgate, Mr Dettling said.
He realised there were some MG suppliers who could not afford to remain with MG but urged those who could afford to remain to do so.
Mr Dettling said MG suppliers who were unhappy with MG’s performance should be taking action to improve their returns.
“It’s up to suppliers and members to drive the cooperative,” he said.
MG is this season offering a forecast full year milk price of $5.20-$5.50 a kilogram milk solids (kgms), behind that of Fonterra which is paying a conditional $5.70-$6.10 kgms.
Warrnambool Cheese and Butter’s opening price for this milk season is $5.50 kgms.