United Dairyfarmers of Victoria calls on Fonterra and Saputo to step up, following Bega move

Bega stepped up at the farmgate this week. The United Dairyfarmers of Victoria say Fonterra and Saputo should follow suit and lift by at least 10c/kg milk solids.

John Keely is one of many dairy farmers across Victoria keen for the processors to step up their farmgate price. PICTURE: ZOE PHILLIPS

MILLIONS of dollars are being blocked from circulating in regional communities due to a dairy farmgate step-up impasse, the United Dairyfarmers of Victoria says.

An estimated $20,000 per annum would be returned to the average dairy farmgate if Fonterra and Saputo followed Bega’s lead this week and passed on some of the extraordinary gains made in recent months.

UDV vice president John Keely has been a dairy farmer since 1982. He said nearly every season over the past four decades — excluding the 2016 clawback — has resulted in at least one farmgate step-up.

“There’s a lot of frustration out there when you see how well international prices have been going. Booming. And sales are going well domestically too,” Mr Keely said.

“If there was even a 10c step-up, an average return of $20,000 would help many farmers pay down debt, but it wouldn’t just stop at the farm. For every dollar spent in the nearby town, there’s probably five or six dollars that gets recirculated in the local economy.

“I know the processors have to provide good returns to shareholders but when they’re doing so well, you’d think there’d be at least one step up by now.”

Australia’s big three processors have hovered around the $6.40/kg milk solids mark for Victorian suppliers since the start of the 2020-21 season, until Bega broke ranks yesterday with a 10 cent step-up.

Fonterra was forced to lift its average opening price in June — from $6.06/kg milk solids to $6.40/kg milk solids — within 48 hours of its initial figure being reported following a backlash from suppliers at the time.

Saputo offered $6.40/kg milk solids at the June 1 deadline while Bega split its opening figure geographically — $6.40 for southern Victoria and $6.55 for northern Victoria.

Bega’s step up this week means southern Victorian suppliers now receive $6.50/kg milk solids and northern Victorian suppliers now receive $6.65/kg milk solids.

Only tow other processors, Bulla and Norco, have offered step-ups this season.

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