The agricultural industry has been hit hard over the past 12 months.
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At the mercy of Mother Nature, farmers have battled drought, fires and floods as well as hot and cold temperatures in the middle of growing season. Add to that industry decline and our producers have had a tough run.
Poppy growers have experienced a drop in world demand for their premium crop. It begs the question whether farmers will continue to have the plant on premium crop rotation if it is not as lucrative.
The dairy industry has also felt its fair share of blows with low farmgate milk prices and the closure of Murray Goulburn’s Edith Creek plant most recently.
On Wednesday, Fonterra announced its forecast farmgate prices for 2017-18 and additional payments for its Australian farmers.
The farmgate milk price ranges of $5.30 to $5.70 a kilogram of milk solids will be paid to Australian suppliers, with an additional payment of 40 cents a kilogram of milk solids to those same producers.
However the company is yet to announce what its opening price will be with producers having to wait another six weeks.
The 40 cent bonus has received mixed reaction since its announcement. Primary Industries Minister Jeremy Rockliff said the forecast was a step in the right direction to rebuilding farmer confidence.
Tasmania Farmers and Grazier’s Dairy Council chairman Andrew Lester said it put farmers on an even footing and that payment could be taken in advance if farmers wanted to expand their business. United Dairyfarmers of Victoria president Adam Jenkins had a different take, saying that the bonus was “not actually rewarding people with more money, it’s just paying them what they were owed in the first place”.
There is no doubt that goodwill between dairy producers and Fonterra and Murray Goulburn has been severely damaged over the past 12 months when Murray Goulburn was forced to drop its farmgate milk price because of bad business decisions.
Fonterra, as the state’s largest milk processor, did not need to follow in Murray Goulburn’s footsteps a year ago but it chose to.
Fonterra is riding on the back of Murray Goulburn’s ill fortune and has capitalised on Edith Creek’s closure to entice suppliers back to the brand. Our farmers have it hard enough dealing with the elements than being used as a pawn in big business games.
