Dairy farmers must shop around for best price

Dairy farmers must shop around for the highest price

Agribusiness
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QDO urges farmers to shop around when their contracts are up.

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About six months ago I wrote an article suggesting that farmers coming off contract should shop around and speak to all processors since some were offering 70c/litre for milk. At the time this caused quite a stir and many people suggested this was untrue and inflammatory. However, the statements were correct.

At this point in time, 70c/L is achievable for all farmers in southern Queensland with average or above average components and bonuses/penalties. So all farmers off contract now, or coming off contract over the next six months, should consult all processors and get a quote for their farm. The averages often spoken in the dairy industry mean nothing.

Farmers need to find out exactly what it means for their farm and the only way to do this is by speaking to all processors and getting quotes for their farm. I always hear stories from farmers where the price they receive in a quote can be 2 or 3c/L different to what they expected based on the average farm.

Norco has recently announced a price increase from October 2019 to June 2020 which amounts to 4.6c/L more for farmers. However, the price increase in January to June 2020 is more like 5.5c/L. Lactalis is negotiating prices for January 2020 on but at this stage there is no agreement. Several smaller processors are also in talks with their farmers about price increases.

I implore all dairy farmers to shop around any time their contract is up. The price you are offered may be less than your current price and, if so, you have lost nothing, and you should stay where you are. However, if you shop around and are offered a higher price with attractive terms you should move. All farmers deserve the highest price possible for their milk so shop around and get the best price for your farm.

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