Aussie Organic Dairy in short-term pay cut, but plans to strike new price deal
The dairy farmers who hold Australia’s largest pool of organic milk have, arguably, decided to take some short pain for long-term gain. What they are doing may surprise you.
A GROUP of dairy farmers holding the largest pool of organic milk in Australia have opted to take a conventional milk price in the short term until they find a home for their product at higher returns.
And they have ditched the True Organic Dairy Farmers Australia Pty Ltd company name in favour of Aussie Organic Dairy Pty Ltd in a bid to break away from the past, following the collapse of their initial venture Organic Dairy Farmers of Australia.
Aussie Organic Dairy chairman Craig Fletcher said the farmers had decided to place their 28 million litres of organic milk with Australian Dairy Farmers Corporation.
Mr Fletcher said the milk would be pooled with conventional milk and paid at a lower price until it negotiated supply contracts with organic dairy processors.
He said the group was in negotiations with four or five parties seeking organic milk.
Mr Fletcher said Aussie Organic Dairy had reached an agreement where ADFC would collect and test the milk and provide data to dairy farmers on milk quality.
“ADFC had underwritten a conventional milk price for our milk,” he said.
“But there is an opportunity to lift the conventional price up to an organic price.
“We also think there is an opportunity to develop an A1-free organic milk market.”
Mr Fletcher said AOD might eventually become an organic milk arm of ADFC.
“But at the moment, we are trying to keep our own identity,” he said.
A source told The Weekly Times there was expected to be a shortage of organic milk once the spring peak volume began to decline — probably before the beginning of December.
He said that would boost prices significantly above the conventional price.
“Aussie Organic Dairy is in a really good position,” he said.
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