Group tackles milk issues

06 Aug, 2014 02:00 AM
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We're comparing the future marketing strategies of all the processors in the State

THE Collective Bargaining Group of WA (CBWA) met with Brownes Dairy last week after it was revealed the processor offered sweetheart deals to a handful of suppliers in an effort to sure up its milk supply.

The meeting followed a similar encounter between CBWA and Harvey Fresh after the release of its controversial new pricing schedule that offered an average two cent per litre price rise across the board and a new milk incentive that would reward farmers with a bonus for additional milk produced in the summer period.

The organisation represents a group of smaller producers accounting for a combined 30 million litres of the State's milk volume,

CBWA chairman Mike Norton said it had met with all of WA's major processors on behalf of its members.

"We're comparing the future marketing strategies of all the processors in the State, particularly Brownes and Parmalat," Mr Norton said.

"We also want to see where both companies might be trying to take the dairy industry."

Mr Norton said CBWA made a proposal regarding the latest contracts to Harvey Fresh on behalf of its members, but he would not comment on the details of the proposal.

Harvey Fresh suppliers have until October 1 to decide whether they will accept the old Harvey Fresh contracts or sign new contracts.

Mr Norton said CBWA met with Brownes to establish what its pricing model might look like compared with the Harvey Fresh contracts set for conclusion in October.

Despite intense competition between processors to secure milk supply, Mr Norton said he could not see milk production increasing in the short term.

"Harvey Fresh have upset all of their small producers who are (now) selling heifers overseas on the boats," he said.

"And of course Brownes has upset all of its suppliers for doing a special deal for a small number of new producers.

"You have got a supply base that that is very unhappy for different reasons to do with both of your major processing companies.

"I really don't think there is a lot of enthusiasm to increase production."

Mr Norton said falling production limited the State's big processors' ability to develop new markets and make the capital investments needed to pay their suppliers.

"Unless the processors put out a more attractive pricing schedule, a whole lot more smaller producers will leave the industry," he said.

Harvey Fresh general manager Paul Lorimer confirmed the company was in discussions with the collective bargaining group, but said it would not be cutting a special deal with them that was different to the company's standard supplier agreement.

"We have said from day one that we want to want to be uniform and transparent with our pricing structure, and as a result there will be no sweetheart deals," he said.

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READER COMMENTS

farmed
6/08/2014 7:21:13 PM, on Farm Weekly

funny how the processors dont see a shortage of milk as a problem. its also funny that palmalat wants harvey fresh to increase throughput by 33% in 3 years. humor all round wouldnt you say!

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