Dairy customers cheesed off

Agribusiness
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HAVING dropped three dairy farmer suppliers last month, Brownes Dairy last week told three premium-quality cheese maker customers it may not be able to supply them with raw milk for part of next year. The cheese makers who collectively purchase between 44,000 litres and 78,000 litres of raw milk a week, depending on the time of year, said they received emails from Brownes on Thursday. They said

HAVING dropped three dairy farmer suppliers last month, Brownes Dairy last week told three premium-quality cheese maker customers it may not be able to supply them with raw milk for part of next year.

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The cheese makers who collectively purchase between 44,000 litres and 78,000 litres of raw milk a week, depending on the time of year, said they received emails from Brownes on Thursday.

They said the emails stated the processor was "uncertain" it would have sufficient raw milk to supply them during January to April.

One of the three said staff at Brownes Dairy's Brunswick plant told him Monday, when he called in for his regular 2500-litre twice-weekly milk pick up, the company "definitely" would not be able to supply him next year.

The issue of Brownes claiming it had too much milk, dropping three suppliers and then telling customers it might not have sufficient milk to supply them, was certain to be raised with Agriculture and Food Minister Mark Lewis yesterday.

Mr Lewis was scheduled to meet WAFarmers' dairy council president Michael Partridge at Murray-Wellington MLA Murray Cowper's Pinjarra office yesterday morning.

They then planned to visit the three out-of-contract farmers, Tony Ferraro, Wagerup, Dale Hanks, Harvey and Graham Manning, Harvey, on their farms.

When asked by Farm Weekly for a comment on Brownes' email to the cheese makers, Mr Lewis said he had been "made aware that following the spring flush supplies are variable".

Face-to-face meetings with Mr Lewis were organised through Mr Cowper's office partly to counter a perception by some in the dairy industry the only thing the State Government and its officials have done for the three was to harass them over welfare of cows being dried off and sent to slaughter and threaten them not to tip unwanted milk into drains.

Mr Manning, a fifth-generation dairy farmer who produced award-winning, grade-one milk, and Mr Hanks, a third-generation dairy farmer and former Western Dairy chairman, have been forced out of the industry.

By the end of this week both will have dried off and sold or leased out their dairy herds, retaining only enough lactating cows for once-a-day milking to feed calves.

Mr Ferraro has vowed to try to stay in the industry until Christmas.

His farm also supports his two sons who had planned to continue.

Another five out-of-contract dairy farmers who supply Harvey Fresh face similar prospects come January when Harvey Fresh has said it will no longer collect their milk.

Brownes managing director Tony Girgis this week confirmed emails were sent to "a couple" of cheese producers suggesting they plan to source their raw milk from another supplier.

"Brownes occasionally sells tiny volumes of excess raw milk (surplus) to requirements to a couple of small cheese producers," Mr Girgis said.

"These people shop around between processors and they seem to, for whatever reason, not want to deal with farmers direct.

"This is a hangover from the past, and frankly a nuisance that distorts our sales and operations forecasting, and one of them owes us money.

"The email was simply meant to tell them to plan their requirement elsewhere."

Speculation about Brownes having an oversupply of milk in September and then telling cheese makers it might not have sufficient milk to supply them in January, surfaced on Saturday at the 85th Brunswick Show.

Mr Girgis described the speculation as a "storm in a thimble".

One of the cheese makers, who asked that his family company which has made a range of boutique cheeses for almost 40 years not be identified, said since receiving the email he had purchased milk direct on-farm from Graham Manning.

The cheese maker said he was only able to buy milk off Mr Manning once his Brownes contract expired.

He said he had previously tried to buy milk off Brownes suppliers and been told their exclusive-supply contracts would not allow it.

"The problem is we would only take part of a farmer's milk and their contracts won't allow them to split supply," he said.

The cheese maker said he purchased between 9000 and 13,000 litres of raw milk a week, mostly from Brownes though not in recent weeks.

Mundella Foods and The Margaret River Dairy Company general manager Peter James said the Margaret River company had received the email.

"I took it as a polite way of saying they did not want our business any more," Mr James said.

He said the company, which produces award-winning artisan brie, camembert and cheddar cheeses and a range of yoghurts, purchased 30,000 to 60,000 litres of milk weekly.

Mr James said he would switch milk supplier but admitted that was "not as easy as it should be".

Robert St Duke of Harvey Cheese, who produces various styles of award-winning cheeses marketed under the Ha Ve label, said he also received the email.

"By coincidence, I had the boss of Harvey Fresh in here last week asking me why we didn't source our milk from him," Mr St Duke said.

"I think I'll be taking him up on that."

The Nationals WA South West Region MLC Colin Holt on Tuesday urged dairy processors to work with State and Federal agriculture ministers to resolve the dairy crisis and ensure a stable fresh milk supply.

"At present WA's milk production is up and three dairy farmers have had their supply contracts discontinued by processor Brownes, and yet Brownes have now conceded that a shortage of supply will leave them unable to provide milk to local cheese makers from January," Mr Holt said.

"Urgent action is needed to prevent more dairy farmers being forced to leave the industry. We must develop different industry options to keep them in production in the long term."

Mr Holt said Coles and Woolworths could play a major role in industry sustainability by stocking WA-made cheese and scrapping $1 a litre discount milk.

Through their supermarket chains, WA imports 300 million litres of milk as cheese, he said.

"We pay the same price for the Eastern States cheese here as they do in Melbourne, so Coles and Woolworths are subsidising that cheese transport.

"If we could make just 10 per cent of the cheese here in Brunswick Junction, rather than importing product, we would not only keep dairy producers in business, but also grow the industry.

"If we don't do something now, we'll have more WA producers leaving the industry. We do not want to get to the stage where we are importing fresh milk into this State," he said.

Last week Collie-Preston Labor MLA Mick Murray attacked the State Government for its lack of help for the farmers.

Mr Murray said that when questioned in parliament last week on what the government had done, Mr Lewis had said it had offered farmers advice on how to safely dump milk.

"The Liberal-National government offered to help farmers 'safely' throw their milk down the drain - if that is the best they can do we are in very serious bother," Mr Murray said.

"These dairy farmers have been left high and dry by the Liberal-National coalition

"I am eagerly awaiting the outcome of the ACCC (Australian Competition and Consumer Commission) dairy investigation following my requests that the regulator look into what is happening in the industry.".

Also last week, WAFarmers began using funds generated by sales of its own brand WAFarmersFirst milk, to pay for transport of milk collected from Mr Ferraro and Mr Manning to be trucked to Eastern States for processing.

But the temporary arrangement to help them avoid dumping their milk is only for 10 days until the $40,000 funds available runs out.

Mr Ferraro, who will benefit most from the arrangement because of Mr Manning's exist from the industry, said he felt like "a drowning man".

"I've got another reprieve," he said.

"It's like being held underwater - every so often they let me up for another breathe of air and then I'm back under again."

Dairy section president Mr Partridge said WAFarmers' priority was to look after the welfare of the farmers and their families.

He said Brownes owner, Sydney-based Archer Capital, had created "fear in the market place" by its actions.

"Archer Capital has transferred the risk of balancing supply and managing seasonal variations to individual farmers, rather than communicate their needs with their supplier base," Mr Partridge said.

He said he expected Harvey Fresh owner Parmalat in January to "behave in a better manner with their suppliers than Archer Capital has with theirs".

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