Dairy getting top shelf priority

We currently have a dairy crisis in this country. Not just for farmers and their local communities. A dairy crisis that will have ramifications for everyone’s access to this safe, affordable and nutritious dietary staple that takes pride of place in every family’s fridge – Top shelf no less

Action is needed now. Action that delivers long term results for our farmers and our communities and every-ones right to drink fresh Aussie milk.

For milk processors its all about their values . It goes right to the heart of their ethics

Its time for the processors to think long term. There is is no room for market opportunism and lining upper management pockets with bonuses. If we want to continue to provide Australians with the high quality dairy foods in this  country then the milk processing industry has to look after the farmers that look after them   Its great to see the ACCC will be doing their utmost  keeping them honest.

Today I am sharing Paula Fitzgerald brilliant op-ed piece from the Stock and Land  Dairy processors missed the memo. Paula has nailed all the issues and put plenty of solutions on the table

In 2014 the Australian dairy industry launched a new vision: “Australian dairy – prosperous, trusted, world renowned nutrition”.

Sadly, events over the last few weeks suggest that some processors, despite endorsing the vision, appear to have lost the memo.

They seem to be working in the opposite direction – taking away the prosperity of their suppliers, dairy farmers, and destroying trust.

Yes, we operate in a global environment and it is volatile.

At times unexpected events unfold.

But does this excuse poor behaviour?

Imagine an employee arriving at their office to be told that their income had been reduced by 20 per cent and as a result they would be working for nothing for the coming two months and their salary for the next financial year was yet to be determined.

Would the worker stay at their desk?

Would they produce their best work?

How would they break the news to their family?

What impact would this have on their mortgage, their budget, the adventure planned for the next school holidays?

This, in effect, is what thousands of dairy farmers have been told. It may be legal but is this ethical leadership?

On Wednesday night over 400 dairy farmers gathered in Terang in Victoria and I also attended the meeting.

These people were angry, distressed and emotional.

Some were looking for a scapegoat and a number of hopeful politicians addressed the audience, indicating they would “stand beside them” but none offered tangible answers.

Key dairy organisations had silent representatives in attendance.

Many ideas were thrown around but there were few solutions.

Some farmers want consumers to pay and others sought the reintroduction of a regulated marketplace.

Many in the room, including those who do not supply the companies responsible for this outrage, anticipate marching on Melbourne.

They want to stand by their fellow farmers and local businesses.

They want to grab attention, cause disruption, capture the minds of consumers, elicit response from governments.

What to do?

The affected dairy farmers need action now, not tomorrow, not next month but now.

Sure, there are activities for the medium and long term to ensure this scenario is not repeated, but for now, there must be a focus on the immediate.

The response requires collaboration and needs involvement from all and if those companies are committed to Australian dairy, now is the time to step-up if there is to be any hope of regaining trust or rebuilding confidence in a great industry.

To the affected farmers, be mindful that right now, the acronyms – ADF, ADIC, UDV, DA, FP – are largely irrelevant and your city-based cousins have no idea what they mean.

Right now you must work together, forget the past, demand tangible action, and harness the support of, rather than whinge to, city-based consumers.

You must tell your story in words they understand.

Be respectful.

Yes, you get up early and work late but so does the bloke trying to run a newsagent, not to mention he faces more traffic than you.

Explain your product is perishable; it cannot be stored in a silo or on a shelf for a better day.

Explain what producing milk requires – seed, fertiliser, water, good crops, healthy cows – and how much it costs.

Tell your story in words the city-based consumer can understand, tap into your shared values – hard work, a fair go, supporting a lifestyle, payment for goods delivered. Share your story with consumers, local decision makers, politicians and the media.

You can play a valuable role.

To the industry and government organisations, forgot the ‘who does what’, the attribution, the paperwork and the process.

Act now.

Where is the 1800 number for farmers to call?

Who are the skilled staff answering the calls?

Famers need a first-class consultant at their kitchen table – are they lined up?

Are they seeking out farmers, particularly those who traditionally shy away from help?

Are the banks proactively engaging with their clients?

Dairy companies, if you cannot revise your decision, have you made personal contact with each of your suppliers to ascertain their needs, work through options and support an informed and coordinated response?

Governments, work across borders, forget committees, allocate resources and in-kind support.

Now is the time for industry, governments and advocacy organisations to demonstrate leadership through collaboration and partnerships.

Make a real difference for the future of Australian dairy; rebuild confidence; and help farmers realise the vision.

#dairylove #compassion #ethics Well said Paula

Follow up

Interesting story by Andrew Marshall from The Land on Co-operatives here  with some cut and past comments below

“MG is a classic case of not being able to deliver on a business plan because market conditions – notably Chinese demand and our exchange rate – turned against them,” Ms Morrison said .

“Agricultural commodities are volatile.

“What’s happened at MG largely occurred because of a turnaround in commodity markets – it can, and does happen to any business.”

She said co-operatives had a proven record as major and trusted agribusinesses worldwide.

Big names such as Rabobank; NZ dairy giant, Fonterra; US-based multinational CHS,and Western Australia’s grain kingpin CBH were all successful co-ops.

Many overseas co-ops had institutional investors and “all manner of hybrid investment structures” not dissimilar to MG’s model which allowed for 40 per cent ownership by non-farmer shareholders.

“In MG’s case its farmer shareholders now have ultimate decision making power to manage themselves out of any difficult situation,” Ms Morrison said.

“Farmers supplying other overseas-owned milk companies have far less access to the levers and decision makers when management decisions turn against them.”

However, being in a farmer-owned co-op does not shield you from harsh market realities said group CEO with WA-based sheepmeat co-op WAMMCo, Coll MacRury.

“You still have to be disciplined about what you spend, and manage the business with a tight commercial focus on the end game,” he said.

“Murray Goulburn’s situation is very sad at the moment, particularly for farmers burnt by price cuts, but being a co-operative doesn’t make the problem different to what any other business would be going through.”

WAMMCo has more than 800 staff processing about 2 million sheep at abattoirs in Katanning, and Goulburn in NSW.

Mr MacRury conceded rural co-op profitability in Australia and NZ was often constrained by low margin commodities and limited access to fresh investor capital when upgrades and expansion were needed.

However, careful long-term management planning was likely to deliver rewards, including membership security, in the long run.

Successful co-ops also tended to foster a powerful co-operative business culture in their region, notably the NSW North Coast – home to Norco, the Casino abattoir, and Macadamia and fishing co-ops