Last mid-season farmgate price cut was in 2009

MURRAY Goulburn’s cut to the farmgate price this morning is not the first mid-season price cut to devastate dairy farmers.

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MURRAY Goulburn’s cut to the farmgate price this morning is not the first mid-season price cut to devastate dairy farmers.

At the end of 2008, following record high prices, farmers received news that prices would be stepping down.

Australia’s largest milk processor co-operative Murray Goulburn informed farmers a week before Christmas and the cuts of between 26-40 per cent came into effect in February 2009.

Fonterra cut its price by 7 cents/kg butterfat and 17c/kg protein from January 2009.

Before this, dairy farmers hadn’t seen a midyear price correction since the early 1980s.

On April 1, 2009 Warrnambool Cheese and Butter delivered its devastating blow. The Allansford based company dropped the price to some farmers by up to 80 per cent compared to the same time in 2008.

Within a week it lost up to 25 per cent of its milk supply. The 230 million litres which walked was picked up by rival companies but in the following months WCB recovered a lot of this milk.

Last August, Fonterra Australia told its farmers to be prepared for the “possibility of a step-down” in milk price this season.

The warning came when the milk processor held it current farmgate opening price at $5.60 a kilogram of milk solids as part of the review.

Then, Fonterra Australia managing director Judith Swales said the company had placed its Australian farmgate price and forecast closing price range for this season “under review given the challenging conditions and extreme volatility that are impacting domestic and global dairy markets”.