Farmers have vented frustration after the two major dairy processors Murray Goulburn and Fonterra posted weak opening milk prices for the upcoming season.
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Togari dairy farmer and MG supplier Paul Gardiner said it was frustrating because of the lack of power farmers felt they had over the farmgate price. “We have a good understanding of what our costs of operation are, but we have no control – we are the price takers not the price setters,” he said.
Meanwhile, federal member for Lyons Eric Hutchinson has revealed a three-point plan to rejuvenate the industry, if the Coalition is elected on Saturday. Mr Hutchinson met with the Tasmanian Farmers and Graziers Association to outline the plan on Thursday. The three points include committing to holding meetings with dairy processors and industry; working with the industry to improve the price structure and investigate a collaborative approach to the industry.
“The way the industry is set up now is failing farmers….dairy is one of the most important industries in Tasmania,” Mr Hutchinson said.
Mr Gardiner has been farming in the Circular Head and King Island areas for more than 30 years and said while price fluctuations are nothing new to the industry, the severity of the recent price cuts were the worse he’d ever seen.
“Every dairy farmer in Tasmania that supplies MG was bracing for a price cut, but we didn’t anticipate the severity,” he said.
“There were no indicators of what the reality was, how low it might go. The reality is they’re planning on getting to $4.80kgMS at some stage but there’s no guarantee.”
On Tuesday, Murray Goulburn announced it would once again cut the price it would pay to farmers for each kilogram of milk solids they produce, plummeting the price further below the cost of production.
The new season, that starts on Friday, will have an opening farmgate milk price of $4.31kgMS for farmers who took up the loan repayment option earlier in the year after severe price cuts were announced for the last two months of the season. Farmers who took the loan, or the “milk supply support package” will lose out on an extra 15c per kilogram to allow MG to get back the money they “overpaid” for the previous season. The state’s largest milk processor Fonterra announced its opening farmgate milk price on Wednesday. Fonterra posted an opening price of $4.75kgMS.