Former United Dairyfarmers of Victoria vice president Roma Britnell urges dairy processors to step up

If Fonterra and Saputo don’t step up soon, it will cost them in the long run. That’s the message from former UDV vice president Roma Britnell, who has called for farmgate action.

Sungold Field Days 2020: Roma Britnell, SW Coast MP, Michael O'Brien, leader of opposition, and Tony Rea, Sungold Field Days Chairman. Photo by Chloe Smith.

A 10c step-up trend has emerged in Victoria’s dairy industry, with Burra Foods following Bega in a farmgate lift — placing pressure on Fonterra and Saputo to follow suit.

Management at Burra Foods last week told suppliers its farmgate average would rise from $6.40/kg milk solids to $6.50/kg milk solids.

The step-up mirrors the figure Bega chose to lift by last week for its southern Victorian suppliers.

Bega also raised its farmgate figure for northern Victoria, from $6.55/kg milk solids to $6.65/kg milk solids.

Saputo and Fonterra remain at $6.40/kg milk solids, a figure confirmed before the start of the 2020-21 season in June 2020.

Former United Dairyfarmers of Victoria vice president Roma Britnell said laggard processors needed to step up now or risk pushing dairy farmers out of the industry.

The Victorian Coalition frontbencher, writing in today’s edition of The Weekly Times, said even Bega’s step up didn’t fully capture the booming international demand for dairy.

“Dairy processors are being short-sighted and putting their own long-term viability at risk with their current farmgate prices,” Ms Britnell said.

“Failing to pay farmers a fair price for their milk that reflects the strong prices the international market is now offering is putting the processor’s investment in stainless steel at risk and shareholders won’t thank them in the long run.”

Bega ingredients general manager Mark McDonald said it was too early to determine whether suppliers from other processors would shift to Bega due to its willingness to step up before its competitors.

“At this stage we have received general positivity from the step up, however, it’s too early to confirm impacts for next year,” he said.

“The step up has been received positively, providing stable milk prices and momentum for the balance of the season.”

Dairy Connect president Graham Forbes congratulated Bega on the move and said it placed pressure on other processors to follow.

“I see the other week that Bega posted a strong financial result. It goes to show that you can both post step ups and do well financially for shareholders,” Mr Forbes said.

Saputo refused to respond to The Weekly Times’ question of whether it would lift farmgate prices.

Fonterra farm source general manager Matt Watt said: “Our next bi-monthly price review is due by the end of March, and we’ll communicate the outcome to our farmers then.”

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