MIlk price release imminent, MG, Burra

And smaller producer, Burra Foods, chief executive Grant Crothers said he expected the company to announce its price within a fortnight.

Speaking after the annual Dairy Australia Situation and Outlook breakfast, in Melbourne, neither would be drawn on the actual figure.

“There are simultaneous demand and supply shocks, which are still working their way, through the market,” Mr Tracy said.

“We will finalise our budgets, and get our price out as soon as we can – it will be in about three weeks time.”

Australian Dairy Farmers Federation acting president David Basham told the breakfast farmers needed to know what the opening price would be, as soon as possible.

Mr Tracy defended  MG’s actions, in offering its 3600 suppliers a milk support package.

“Unfortunately, we have stepped down our milk price, mid-season, that has had a very disappointing impact on our farmers, but we knew there would have been an enormous impact, if it had flowed right through.”

He said the milk supply package would minimise the cash impact of farmers to less than one cent, per litre, on an annualised basis.

“To smooth out the impact over the next three years, it will be somewhere between one third and to two cents, per litre for the next two to three years.”

Mr Tracy described MG’s governance systems and processes as “robust.”

“The market signal that flowed through, flowed through very, very late in the year, the fact it flowed through, so late in the year, it made it very difficult for our farmers to accommodate.

“We were seeing the broad bulk commodity signal flow through, but we also had the major negative, countered by a major positive, in our dairy food numbers.

“In our December 31 result, there was something like 27 per cent increase in sales value and margin - we were holding our price.”

He brushed off criticism by fellow panellist, Bega Cheese chairman Barry Irvin and Mr Crothers.

Mr Irvin told the breakfast said trust was cultural.

“If we don’t address the public and this in a very direct way, we will see this again, and again and again – we have to publicly talk about what happened,” Mr Irvin said.

He said his suppliers had been asking him why Bega could not match MG’s price, while Fonterra had been openly saying it was too high.

“The actual price from MG is impossible to work out, because it is hidden by something that is called a milk supply support program – that sounds like a collective loan, to me.”

Mr Irvin said it was a moral decision to hold the price Bega offered.

“It is about thinking very deeply about the lives of the people you affect,” he said.

Bega had also been affected by the loss of trust, in the industry.

“Suspicion doesn’t just stop at a particular industry, it goes right across the industry.”

Mr Crothers said it was disappointing suppliers of smaller processors, like Burra, could not gain access to government concessional loans.

“I think it’s the irony that the more responsible processors, like Burra and Bega, haven’t stepped down, but our suppliers won’t qualify for concessional loans.

“I am paying my tax, I am doing my best to be responsible to the industry, but effectively our suppliers are disadvantaged.

“That’s our taxes at work, but it’s a little bit insulting for those who run a business that works.”

He said the timing was the major issue.

Mr Tracy said MG had done exactly what its farmers expected it to do.

He said there was a “lot of misinformation” around the debate –  “I expect our competitors to have pot shots,” Mr Tracy said.