News

Farmers unite to form co-operative

By Sophie Baldwin

UNITED WE Stand farmers are in the process of legally forming their own co-operative after receiving overwhelming support from the dairying community.

The group has formally elected a committee, which includes chair Marshall Jacobs (Rochester), secretary Cheryl Hawken (Bamawm), spokesman Steve Hawken (Bamawm) and directors Scott Somerville (Timmering), Chris Gamble (Bamawm) and Dehne Vinnicombe (Calivil).

Mr Hawken said it was evident from discussions UWS has had with both processors and dairy farmers in the past three months, that the group needed to formalise its position.

“We have had so much support from the dairy farming community but we now have to do our due diligence and formalise things so we can be taken seriously,” he said.

“This isn’t a fly-by-night thing — we are committed to the future of the industry.

“We are offering a glimmer of hope. We are not here for shortterm gain — we are in this for the long-term and are setting ourselves up accordingly.”

Three months ago the group called for expressions of interest from dairy suppliers interested in pooling their milk, and the organising committee’s phones have not stopped ringing since.

Calls have been received from farmers right across the country milking anything from 50 cows up to large herds.

UWS representatives have even spoken to a large group of farmers at Korumburra in south Gippsland.

“It has become evident to us that it doesn’t matter if you are milking 50 cows or 500, everyone has the same problem and that is we need to be paid what our product is worth,” Mr Hawken said.

He said they had all had calls from farmers worried about financially being able to pay for the grain and hay they were 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.”

Mr Hawken said the Murray Goulburn debacle in 2016 had been a real catalyst for change.

“Processors in Australia have a proven history of paying their suppliers as little as possible for as long as they can.

“Shifting processors will not change the price but the hole in the factory we leave behind will.

“As farmers we need to remember we do have some power — without milk going through their stainless steel, processors don’t have a business.”

Fonterra managing director Rene´ Dedoncker said the success of the co-op would come down to money.

“I would always encourage entrepreneurship and if there’s a smarter way to keep us all on our toes, that’s good,” he said.

“It clearly depends on all the details (whether Fonterra would process the group’s milk).

“What we know is that you need all the elements of the value chain in place to give yourself certainty, so for this group it’s one thing to have control over making it, it does need to be processed consistently and then it needs a destination.

“Where does it go? They need to almost think back from market to say what is the opportunity we are targeting with this, and is it just a powder mix, is it a cheese mix, what is it?

“The economics will determine who’s interested.

“If the economics stack up and there’s value in it for everyone, they should attract interest — but we shouldn’t underestimate the difficulty in the economics beyond the next three to six months.”