A GROUP of northern Victorian dairy farmers, that in May called on the dairy community to pool its milk in a bid to obtain a sustainable milk price, has taken the idea a step further and is in the process of legally forming a co-operative.
The United We Stand Dairy Farmers group has formally elected a committee, which includes chair Marshall Jacobs from Rochester; secretary Cheryl Hawken from Bamawm; directors Scott Somerville from Timmering, Chris Gamble from Bamawm and Dehne Vinnicombe from Calivil; and spokesman Steve Hawken from Bamawm.
Mr Hawken said it was evident from discussions they had had with both processors and dairy farmers that, to be taken seriously, they legally needed to formalise their position.
“We have had so much support from the dairy farming community but we now have to do our due diligence and formalise things,” he said.
“This isn’t a fly-by-night thing — we are definitely committed to the future of the industry.
“We are offering a glimmer of hope. We are not here for short-term gain — we are in this for the long-term and are setting ourselves up accordingly.”
Mr Hawken said the Murray Goulburn debacle in 2016 had been a real catalyst for change, along with milk production shortfalls this season that will leave processors scrambling for milk.
“As farmers we need to remember we do have some power — without milk going through their stainless steel, processors don’t have a business.
“They have a proven history of paying their suppliers as little as possible for as long as they can and shifting processors will not change the price, but the hole in the factory we leave behind will.”
Mr Hawken said the group had had calls from farmers across the country worried about being able to pay for the grain and hay they are currently feeding their cows, let alone making it to the first irrigation in spring.
He said milk volumes were in real danger of decreasing even further this year.
“Processors should beware — they may not get the milk volumes they are expecting, especially if conditions stay the way they are, production could be down 10 to 20 per cent.”
Three months ago the group called for expressions of interest from dairy suppliers interested in pooling their milk and the organising committee phones have not stopped ringing since.
Farmers right across the country, regardless of whether they are milking 50 or 500, are worried about making it through the year.
Dean Kendrick from Kyabram entered the industry five years ago.
“As an industry we can’t continue to keep wearing increasing costs,” he said.
“Everything comes back on us and when the milk price doesn’t cover these costs the future certainly doesn’t look too bright.”
An Australian Competition and Consumer Commission inquiry into the dairy industry released in April found there were significant imbalances at each level of the dairy supply chain, from retailers to dairy processors and processors to farmers.
The inquiry found even if processors were to receive higher wholesale prices from sales to supermarkets, this didn’t mean processors necessarily passed it on to farmers.
The ACCC said farmers’ ability to capture their appropriate share of profits would, as in all industries, depend on their bargaining power. It noted most dairy farmers had little bargaining power and limited scope to reposition their business.
Mr Hawken said it was time the dairy industry pulled together.
“There is no-one representing us with a true farmers’ voice,” he said.
“A sustainable price allows our business and industry to grow and will ensure we have another generation of farmers coming along.
“The average age of an Australian dairy farmer is in their 60s and that’s frightening and dangerous.”