Dairy Farmer Issues

[bobthebilda]

Ok, i dont mean to sound like an insensitive *****, and am willing to be further informed, but alot of the issues and outcry from Dairy farmers doesnt make much sense to me. From my understanding,most of the larger Milk processors are either Farmer cooperatives,or were Farmer cooperatives. Thus its actually the Farmers who are the shareholders of the processors, and in reality it themselves who have elected individuals to offer them a lower milk price. If you look at the Board of Directors of Murray Goulburn, most of them have Dairy Farms.

Off course, they are offering these lower prices, due to lower world prices. But its also the Farmers etc that wanted the world to be open up to allow them to chase other markets. I cant recall the farmers complaining when they were receiving too much money when things were going good.

Again, the Price of milk (or the price of solids - which i think milk prices are based on), has fallen due to production out stripping demand. Is it not just the world saying, cut down on your production, and prices will stabalise. Is farming somehow different to any other business?

Last time i checked, Neither Coles or Woolworths had special machines that allowed them to make Milk. They are getting their Milk from Dairy Farmers. Its not Coles or Woolworths or even Customers that are damaging Dairy Farmers, is it not themselves.

Maybe Dairy Farmers should form a sort of Union (Farmers Union sounds logical, but already taken lol). Oh actually they already do, its called Farmer Cooperatives like Murray Goulburn etc.

[xisled]

One thing I find funny with this whole milk thing is yesterday Coles said customers will be able to buy milk that costs 20 cents extra and the profits will be donated to the farmers by Coles.

All I hear out of that is Coles charging extra for the milk, public think they are doing something good and get a warm fuzzy feeling inside, Coles donates money to the farmers and takes all the credit plus all the tax perks for donations.

[Giant Cranium]

i honestly don't know why people buy the cheap white water,

quality milk tastes great, add caramel or milo and its one of the best drinks ever.

[Squalo]

Originally Posted by Giant Cranium

i honestly don't know why people buy the cheap white water,

quality milk tastes great, add caramel or milo and its one of the best drinks ever.

Yep my kids can certainly taste the difference. $1/litre milk has had all the good stuff taken out, and then just enough put back in so they can legally call it milk.

[XB GS 351 Coupe]

Originally Posted by Squalo

Yep my kids can certainly taste the difference. $1/litre milk has had all the good stuff taken out, and then just enough put back in so they can legally call it milk.

Haha funny that, there are no home brand cows, and the taste difference is all in the imagination.

You are saying a product that is more processed costs less?? Makes no sense, it's the exact same milk with a different label

[ebxr8240]

Originally Posted by XB GS 351 Coupe

Haha funny that, there are no home brand cows, and the taste difference is all in the imagination.

You are saying a product that is more processed costs less?? Makes no sense, it's the exact same milk with a different label

They take some solids out to make butter etc . Trust me it's watered down ., like oils .. Sole .

[mr smith]

Its not cool to be a tight ****. Pay for good quality food and enjoy proper nutrition and keep fellow aussies in a job. Just rememer it may be your job on the block next...

[Blue Shadow]

Originally Posted by XB GS 351 Coupe

Haha funny that, there are no home brand cows, and the taste difference is all in the imagination.

You are saying a product that is more processed costs less?? Makes no sense, it's the exact same milk with a different label

Not imagining anything it is different

[XB GS 351 Coupe]

Originally Posted by Blue Shadow

Not imagining anything it is different

Ok this has me intrigues, I am going shopping on Wednesday or Thursday, we been buying Coles brand milk for the last four years.

I will buy our normal Coles brand as well as one or two name brands and will let the kids do a blind taste test.

Will report back when it's done.

Can't see there being any difference in taste, but then agin I don't drink milk, milk is for baby cows and I am certainly not one of those..

[prydey]

Originally Posted by XB GS 351 Coupe

Haha funny that, there are no home brand cows, and the taste difference is all in the imagination.

You are saying a product that is more processed costs less?? Makes no sense, it's the exact same milk with a different label

the nutritional info from brand to brand does vary. some have slightly higher fat content, others have higher salt etc. there are minor differences so i'm guessing it is in fact slightly different to each other and not 'exactly the same' as you put it.

i'd love to be able to pay a bit more and support certain things, but at the end of the day, i have to make my pay packet support my family. if that means buying $1 milk, then thats what i'll do. i work in an industry that is heading the same way as automotive except without the subsidies and the media attention (like a million industries out there). pay has been stagnant for over 10years but inflation hasn't, so as much as its nice to have 'ideals', the reality is very different for many families.

[Blue Shadow]

Originally Posted by prydey

the nutritional info from brand to brand does vary. some have slightly higher fat content, others have higher salt etc. there are minor differences so i'm guessing it is in fact slightly different to each other and not 'exactly the same' as you put it.

i'd love to be able to pay a bit more and support certain things, but at the end of the day, i have to make my pay packet support my family. if that means buying $1 milk, then thats what i'll do. i work in an industry that is heading the same way as automotive except without the subsidies and the media attention (like a million industries out there). pay has been stagnant for over 10years but inflation hasn't, so as much as its nice to have 'ideals', the reality is very different for many families.

Im not saying you shouldn't buy it, I just prefer the taste of a particular brand.

[XB GS 351 Coupe]

Originally Posted by prydey

the nutritional info from brand to brand does vary. some have slightly higher fat content, others have higher salt etc. there are minor differences so i'm guessing it is in fact slightly different to each other and not 'exactly the same' as you put it.

A lot of that would be due to different testing companies and the nutritional label only shows and approximate/average value of the test batch, and that it is unlikely every batch of milk produced day to day season to season would be identical as cows would be on different quality feed at different times.

We been using Coles branded milk for four years exclusively and have had no complaints.

We also buy Coles brand rice and pasta which tastes exactly the same as branded rice and pasta which we have also bought when on half price special.

Bit off topic I love buying the Coles half price specials but I get annoyed as I know they are still making money on selling us the stuff at half price, so imagine the huge profit margins on branded products, all you are paying for is a glossy label and brand name, the product inside is no different.

[hawkgirl]

When bottled water costs more than bottled milk there's an issue somewhere.

[supershifty]

I buy my milk from Coles at $1/litre, because it's convenient for me to shop there.

I wouldn't mind paying what was initially proposed as a 20c levy per litre (maybe 50c now) to help the farmers. Without those people we'd be ****ed. I do not want to buy imported milk because our dairy farmers have gone bust - that's nuts!

I heard this briefly on the radio yesterday about Coles and haven't given it any research. How do I know that Coles' levy will go directly back to the dairy farmers at the farmgate?

Yes, Coles doesn't buy directly from the dairy, they buy through a co-op and the coin changes through many hands before it lands in our fridge. There's storage, packaging, refrigeration, distribution and retailing to consider.

Pretty cheap at $1/per litre all things considered?

Cheers!

[Squalo]

The problem with buying $1/litre milk is that you're enabling the Coles/Woolworths juggernaut, which will continue to steamroller ALL suppliers - not just talking milk here - and force those that don't play ball out altogether.

Anyone noticed how many Coles/Woolworths brands are on the shelves lately? Have you also noticed that the branded products are gradually disappearing?

Everyone thinks the low prices are terrific, but how will things look when the only brands left on the shelf are the 'premium' brands, and the staples are all Coles/Woolworths? They'll then push the prices up - because what are you going to do? There will be no alternatives. Pay more for their arguably inferior product, or pay more again for the premium stuff that they make a larger margin on?

Eventually they'll push the 'premium' brand stuff out too, and bring in their own premium lines - except in high income localities where people are happy to pay for the good stuff (they already stock their supermarkets differently between low income and high income areas).

This is hardly rocket science... there's no free lunch. Support the branded product manufacturers, or kiss them goodbye - and then pay the higher prices for an inferior product.

Make no mistake, Coles/Woolworths are completely ruthless and without ethics when it comes to maximising shareholder profit.

[GasoLane]

Originally Posted by Squalo

Make no mistake, Coles/Woolworths are completely ruthless and without ethics when it comes to maximising shareholder profit.

I remember hearing an interview on ABC radio a few years ago with a Dairy farmer from near Murray Bridge (SA)

Seems he put his dairy farm on the market which came with a Coles contract.
He was approached by a rep from Coles with a price that was way under what he wanted.

When he refused he was told that if he didn't take them up on the offer the contract might not be there for the next owner.
Now exactly extortion but awfully close, as he said that without the contract it would be much harder to sell the property.

[383hq]

Originally Posted by GasOLane

I remember hearing an interview on ABC radio a few years ago with a Dairy farmer from near Murray Bridge (SA)

Seems he put his dairy farm on the market which came with a Coles contract.
He was approached by a rep from Coles with a price that was way under what he wanted.

When he refused he was told that if he didn't take them up on the offer the contract might not be there for the next owner.
Now exactly extortion but awfully close, as he said that without the contract it would be much harder to sell the property.

I think that's part of the end game here - after retrospectively reducing the price to be paid to farmers for produce over the last X months, they are offering "early dividend" and "bridging loans".

Effectively admitting they know the input costs of the farmer are higher then what they're now prepared to pay. Guess what happens to those that can't repay their bridging loans...

FWIW I stopped buying $1/1l milk 2 weeks ago. Buying the otway farmers milk now $3.60 for 2 litres where I can.

[Batmobile]

Originally Posted by 383hq

I think that's part of the end game here - after retrospectively reducing the price to be paid to farmers for produce over the last X months, they are offering "early dividend" and "bridging loans".

Effectively admitting they know the input costs of the farmer are higher then what they're now prepared to pay. Guess what happens to those that can't repay their bridging loans...

FWIW I stopped buying $1/1l milk 2 weeks ago. Buying the otway farmers milk now $3.60 for 2 litres where I can.

I could write a book about the flight of our agriculture industry. You do understand that the dairy farmer is paid a agreed cents per kilogram of butter fat. In the main the rate is very much equal between the major suppliers. So whether you pay $1 or $3 per litre of milk currently it will make no difference to the dairy farmer.
The suppliers have no interest in the sale of milk - the money is to made in value added products - powder to Asia Pacific , finished products like cheese , yohurts , protein drinks , flavoured milk etc etc.
Even with a stable known rate paid to the farmer , its the input costs of feed , animal welfare , and most important water that causes in the main to cause our farmers to fail
With dry conditions , increasing input costs this in the main is causing our farmers to fail
As was said earlier , many farmers fail on settling that supplier loans only to have them refinanced for a further season. This practice continues (only in a effort to avoid closure) until such time that the farmer calls it a day and sells out to the corporate entity or neighbour or has no longer any equity or insufficient cash capacity to meet their financial committments.
Once upon a time it was deemed a good dairy farm would milk 200 odd cattle now it isnt worth getting up in the morning unless you are doing 400+ and have acquired water access rights
Agree , every effort should be made to save our agriculture infrastructure in Aust and we should be mindful of the overseas swell to acquire large parcels for exporting leaving either rubbish for domestic consumption or nothing

[Blue Shadow]

Originally Posted by Squalo

The problem with buying $1/litre milk is that you're enabling the Coles/Woolworths juggernaut, which will continue to steamroller ALL suppliers - not just talking milk here - and force those that don't play ball out altogether.

Anyone noticed how many Coles/Woolworths brands are on the shelves lately? Have you also noticed that the branded products are gradually disappearing?

Everyone thinks the low prices are terrific, but how will things look when the only brands left on the shelf are the 'premium' brands, and the staples are all Coles/Woolworths? They'll then push the prices up - because what are you going to do? There will be no alternatives. Pay more for their arguably inferior product, or pay more again for the premium stuff that they make a larger margin on?

Eventually they'll push the 'premium' brand stuff out too, and bring in their own premium lines - except in high income localities where people are happy to pay for the good stuff (they already stock their supermarkets differently between low income and high income areas).

This is hardly rocket science... there's no free lunch. Support the branded product manufacturers, or kiss them goodbye - and then pay the higher prices for an inferior product.

Make no mistake, Coles/Woolworths are completely ruthless and without ethics when it comes to maximising shareholder profit.

100% correct. I buy a brand called Farmhouse, its old fashion milk and has cream on the top. 1.5 ltr i think is about $2.00, wouldn't buy anyrhing else.

[Franco Cozzo]

I wish farmers would have their own online stores setup or distribution network of some sort, it would be great to be able to cut out Coles/Safeway and the questionable business practices how they squeeze the crap out of farmers and then sell their products for huge margins when the customer pays for it.

I'd be down for buying direct from a farm as long as they could get their product to me somehow.

[Grunter]

The main people to "blame" ultimately are the people that buy private label milk at the prices the big two sell it for. There is a lot of choice outside of Coles/Woolworths private label brands.

The ones I feel for are the farmers in the co-ops that fell for the business model that promised a lot and delivered little in the medium/long term. Pre the big 2's deal, retail price per litre on private label averaged $1.55 pre 2010. Post 2010 the average has hovered around $1.00. Doesn't need much thought on who is ultimately wearing that cost reduction. Gets even worse if you factor inflation over the past 5/6 years.

[mcflux]

From my understanding,most of the larger Milk processors are either Farmer cooperatives,or were Farmer cooperatives. Thus its actually the Farmers who are the shareholders of the processors, and in reality it themselves who have elected individuals to offer them a lower milk price. If you look at the Board of Directors of Murray Goulburn, most of them have Dairy Farms.

The former chief Gary Helou is under ACCC investigation.

Off course, they are offering these lower prices, due to lower world prices. But its also the Farmers etc that wanted the world to be open up to allow them to chase other markets. I cant recall the farmers complaining when they were receiving too much money when things were going good.

Here's the thing. They were offered a $5.60/kg milk solids for 12 months LAST YEAR. The farmers subsequently (throughout last year/this year) adjusted their herd sizes and other cost factors (water licences, feed, veterinary and environmental costs, etc) only to be told recently that the price was being cut to $5.00/kg RETROSPECTIVELY.

Comparison to your job:
Last year you were offered say a $3000/week job for 12 months, the job is guaranteed to be ongoing but the $/week is up for review in 12 months' time. You subsequently upgraded your car, bought a new house and undertook renovations, ate out more, and upgraded your health insurance plan because you can budget that based on your expected income for the year. That, and next year looks to be rosy as well.

In the 10th month your employer tells you "oh, our bad, it was meant to be $2500/week since the beginning of the contract. Since the cuts are retrospective that means the first 10 months of being overpaid need to be squeezed in to the final 2 months, resulting in you actually having to pay US $1312.50 per week for the final 2 months and still perform at your job."

Hory shet. You now can't make your mortgage payments, your car loan payments, you're living on baked beans, you've gotten rid of your health insurance hoping you don't get sick...

The difference with that comparison is the dairy farmers were already doing it tough before this was dumped on them.

Again, the Price of milk (or the price of solids - which i think milk prices are based on), has fallen due to production out stripping demand. Is it not just the world saying, cut down on your production, and prices will stabalise. Is farming somehow different to any other business?

China's been stockpiling milk products and are now eating into their stockpile. Russia has sanctions against Western dairy. The EU has deregulated and there's now an epic glut in the EU. Water licences are being bought up by superannuation/investment companies so the allocations farmers get a hold of are at sky-high prices (supply and demand). All of this is impacting on Aussie farmers.

Last time i checked, Neither Coles or Woolworths had special machines that allowed them to make Milk. They are getting their Milk from Dairy Farmers. Its not Coles or Woolworths or even Customers that are damaging Dairy Farmers, is it not themselves.

Coles and Woolworths with their contractual buying power and their "milk war" starting in 2010 have most definitely damaged the livelihoods of dairy farmers!!!

Our politicians from the major camps are saying/doing bugger-all on this and it's driving farmers to suicide.

Here's a change.org petition aimed at our current Agriculture minister (also leader of the Nats and our Deputy PM) - link here - please sign it to get the attention of the government!!!

^^^ This is an apolotical stance, something needs to be done by WHOEVER is in charge.

What can we do to help in the meantime? Buy branded dairy products and avoid the no-name Coles/Woolies etc products!

[rjk74]

And adding to this, blue green algae is everywhere in the irrigation channels in northern Victoria. Travelled up there for a job yesterday to a farmers property and he's giving his cattle tank water as the green water would kill them.

[Bearman]

Originally Posted by Ghia5L

Here's the thing. They were offered a $5.60/kg milk solids for 12 months LAST YEAR. The farmers subsequently (throughout last year/this year) adjusted their herd sizes and other cost factors (water licences, feed, veterinary and environmental costs, etc) only to be told recently that the price was being cut to $5.00/kg RETROSPECTIVELY.

Comparison to your job:
Last year you were offered say a $3000/week job for 12 months, the job is guaranteed to be ongoing but the $/week is up for review in 12 months' time. You subsequently upgraded your car, bought a new house and undertook renovations, ate out more, and upgraded your health insurance plan because you can budget that based on your expected income for the year. That, and next year looks to be rosy as well.

In the 10th month your employer tells you "oh, our bad, it was meant to be $2500/week since the beginning of the contract. Since the cuts are retrospective that means the first 10 months of being overpaid need to be squeezed in to the final 2 months, resulting in you actually having to pay US $1312.50 per week for the final 2 months and still perform at your job."

Hory shet. You now can't make your mortgage payments, your car loan payments, you're living on baked beans, you've gotten rid of your health insurance hoping you don't get sick...

The difference with that comparison is the dairy farmers were already doing it tough before this was dumped on them.

Great post Ghia5L, the bit I've quoted is for me the big issue. As a result of what has been described above these farmers have suddenly got a debt of something in the neighbourhood of $100-120K in addition to any they may already have. Pow!! Just like that. All because SOMEBODY ELSE screwed up.

Fluctuating income for whatever reason is a fact of life for them and they roll with it as anyone in business would understand but through no fault of theirs they have been saddled with this. But their land is worth heaps people may say. That's all very well but that land is their business capital which requires a big investment in plant and equipment.

In the scenario as described by Ghia5L try going onto a construction site and laying that on your workers, you'd end up with a crowbar through your skull in no time flat!!

This will send farmers broke and off the land, it has already sadly driven some to take their own life. The Chinese will come in, buy up these abandoned farms on the cheap and when that happens every drop of product coming from that land will be going straight to China and we will NEVER EVER get that land back.

Our chicken hearted pollies have no clue, or willingness to get a clue and act. The opposition? Not so much as a fart or quack from them either!!

"So just move on and do something else" people may say but that is way to simplistic, farming is a way of life. I grew up on a dairy farm so I understand it and the fact my parents lived on the bones of their butts and worked like slaves to provide for my family.

This is a very serious situation and has ramifications for other sectors of primary industry. With manufacturing pretty much flatlined we are fast heading towards a situation where we as a country will not be able to feed and clothe ourselves, we will be entirely dependent on foreign interests.

Sorry about the long post!!!

[bobthebilda]

Originally Posted by Bearman

Great post Ghia5L, the bit I've quoted is for me the big issue. As a result of what has been described above these farmers have suddenly got a debt of something in the neighbourhood of $100-120K in addition to any they may already have. Pow!! Just like that. All because SOMEBODY ELSE screwed up.

Fluctuating income for whatever reason is a fact of life for them and they roll with it as anyone in business would understand but through no fault of theirs they have been saddled with this. But their land is worth heaps people may say. That's all very well but that land is their business capital which requires a big investment in plant and equipment.
!

And this is where the Bull$4it part of all this needs to be corrected. As per Murray Goulburns own website-

http://www.mgc.com.au/our-story/our-heritage/

Today, Devondale Murray Goulburn processes one-third of the nation’s milk supply and is controlled by over 2500 dairy farmer-shareholders. The highs and lows of its 60-year history give Devondale Murray Goulburn a wealth of experience and knowledge of the nation’s dairy industry which sets it apart.

The Dairy Farmers who control the co op, are ****ed off that they are screwing themselves over.

Oh,and just so we all know where the likes of Woolies and Coles are able to get their milk from

http://www.theaustralian.com.au/busi...72dfea7f3a9fc5

Coles struck a new long-term supply deal last year with Murray Goulburn that will see the co-operative supply Coles with about 200 million litres of private-label fresh milk annually.

[Dezza]

Originally Posted by bobthebilda

The Dairy Farmers who control the co op, are ****ed off that they are screwing themselves over.

You make it sound like all the suppliers are to blame. My parents are dairy farmers, and have been Murray Goulburn suppliers for many years. They have a lot of shares in the company, which have now basically HALVED in value. Not only that, they're planning to retire in about a year, and will be selling the farm. These price cuts will have a big impact on the value of the farm as nobody will want to buy a dairy farm if the situation remains the same in the 12 months or so when they put it on the market. Like the vast majority of MG suppliers, they had nothing to do with this decision. The directors and board members made the call. Sure they might also own farms themselves, but they would certainly be high paid and would not be the ones who suffer the consequences. My dad is one of the hardest working men I've ever known, and it's going to be a tragedy if he doesn't get the rewards for all that hard work over all these years.

[mcflux]

Originally Posted by Dezza

You make it sound like all the suppliers are to blame. My parents are dairy farmers, and have been Murray Goulburn suppliers for many years. They have a lot of shares in the company, which have now basically HALVED in value. Not only that, they're planning to retire in about a year, and will be selling the farm. These price cuts will have a big impact on the value of the farm as nobody will want to buy a dairy farm if the situation remains the same in the 12 months or so when they put it on the market. Like the vast majority of MG suppliers, they had nothing to do with this decision. The directors and board members made the call. Sure they might also own farms themselves, but they would certainly be high paid and would not be the ones who suffer the consequences. My dad is one of the hardest working men I've ever known, and it's going to be a tragedy if he doesn't get the rewards for all that hard work over all these years.

I understand that in some cases farmers were sometimes "paid" in MG shares rather than actual monthly cheque dollars when it came to milk supply ("trust us the shares are worth equal to if not more than the cash equivalent"), and thus became shareholders in this way, rather than investor shareholders who are actually injecting capital in to the co-op.

[STEALTHY]

Originally Posted by Ghia5L

Comparison to your job:
Last year you were offered say a $3000/week job for 12 months, the job is guaranteed to be ongoing but the $/week is up for review in 12 months' time. You subsequently upgraded your car, bought a new house and undertook renovations, ate out more, and upgraded your health insurance plan because you can budget that based on your expected income for the year. That, and next year looks to be rosy as well.

In the 10th month your employer tells you "oh, our bad, it was meant to be $2500/week since the beginning of the contract. Since the cuts are retrospective that means the first 10 months of being overpaid need to be squeezed in to the final 2 months, resulting in you actually having to pay US $1312.50 per week for the final 2 months and still perform at your job."

If i sign a contract for a job on $x, i will recieve $x for my services. In your scenario about the solid prices, how the hell did they have an out in the contract that allowed it (and why would anyone in their right mind sign such a deal).


Semi related, i have to laugh at the people who used to say "I only buy Golden North cause its from the country, so its creamier". No princess, its made on the same production line as Pura and all the other milks (Coles and Woolies included, all that changes is the carton/label). Not sure about this watered down **** as i havn't work there for a few years, but back then people had the same argument as i'm hearing now that they can taste a difference when it all came out the same vat!

[mcflux]

Originally Posted by STEALTHY

If i sign a contract for a job on $x, i will recieve $x for my services. In your scenario about the solid prices, how the hell did they have an out in the contract that allowed it (and why would anyone in their right mind sign such a deal).

There must have been on of these little guys in the contract --> *

And the bottom of the contract page would've said something like this:

* The price offered may be subject to the whims of the powers that be.

Actually there is a direct comparison to the situation the dairy farmers are suffering, although the results aren't as immediately catastrophic:

Your home loan contract that you have with the bank.

Remember last year when the RBA interest rate was kept on hold for the 1000th month in a row, and all of a sudden a few of the banks decided to up their interest rates due to a whole range of asterisks? *Operating costs *Revenue losses *Market conditions *Random excuse

My thoughts on banks tends to be four asterisks. ****s.

Although in my above example the dairy farmers thought they were in a fixed-rate agreement rather than the variable-rate agreement example I've described above.

[STEALTHY]

Originally Posted by Ghia5L

There must have been on of these little guys in the contract --> *

And the bottom of the contract page would've said something like this:

* The price offered may be subject to the whims of the powers that be.

Actually there is a direct comparison to the situation the dairy farmers are suffering, although the results aren't as immediately catastrophic:

Your home loan contract that you have with the bank.

Remember last year when the RBA interest rate was kept on hold for the 1000th month in a row, and all of a sudden a few of the banks decided to up their interest rates due to a whole range of asterisks? *Operating costs *Revenue losses *Market conditions *Random excuse

My thoughts on banks tends to be four asterisks. ****s.

Although in my above example the dairy farmers thought they were in a fixed-rate agreement rather than the variable-rate agreement example I've described above.

Well if you're not going to read the fine print, too bad for you (them)