A veteran south-western dairy farmer says positive links with the company that bought Fonterra's Dennington processing plant four years ago, are helping rebuild trust in the industry.
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Duncan Morris, Cobden, is part of the South West Dairy Limited (SWDL) co-operative, which supplies the Provico's Dennington factory.
He said the loss of trust from the milk price clawbacks of 2016 had been "extraordinary", but working with Provico had helped rebuild it.
Provico took over Fonterra's former Dennington factory in 2020 , and now produces skim and whole milk powder and functional nutrionals.
"We are able to discuss issues fairly and transparently, with one another," Mr Morris said
"We are trying to work together and not be at arms' length on everything that happens in the industry.
"Not only do we need one another, both parties need to be profitable for the industry to thrive."
He said there was "an awful lot of uncertainty in the industry", with opening milk prices about to be announced.
"It's apparent to me everyone is being cautious this year, whereas they have been ambitious during the last couple of years, pushing to hold existing milk or chase new supplies."
He said Provico had encouraged the SWDL's 25 members to reach out to other farmers.
"They have authorised us to recruit more milk, if we can find it," he said.
"We really are providing somewhere for the small to medium family farms, particularly seasonal producers, to get a fair and reasonable price," he said.
"And they do not get that from the major processors."
But he said until farmers started to see opening prices "they are not going to put a signature on a piece of paper - and that comes out of the trust issues of 2016," he said.
He said SWDL had grown in membership, every year, amidst a shrinking milk pool - "I don't think there's a lot of companies that could say that."
SWDL was going into its fifth year, having grown from eight suppliers when it was founded.
Brucknell dairy farmer and SWDL chair Brad Couch, said its members valued homegrown pasture milk and the co-op was committed to fairness.
"We have consistently maintained competitiveness and fairness by offering our suppliers the same price, irrespective of their volumes, without any 'special deals' or preferential treatment," Mr Couch said.
"Our steadfast commitment has attracted a notable proportion of our suppliers under 40. "
He said that was testament to the pricing model SWDL and ProviCo had agreed upon, with no spring milk discounting.
"It therefore has encouraged young, aspiring farmers to join and remain in the dairy industry ensuring its long term viability."
Provico chief executive Ben Anderson said the company was building the next generation bio-nutrients and functional ingredients facility at Dennington, at a time when new investment was scarce and dairy plants were closing.
But the timing of the reopening of Dennington coincided with a severe downturn in international dairy markets while farm gate prices rose by 30 per cent.
"Southern farm gate prices have become out of step with the global dairy market," he said.
"Australian exported dairy products are now expensive compared to our competitors in the US and New Zealand".
Provico chief executive Ben Anderson said the company was building the next generation bio-nutrients and functional ingredients facility at Dennington.
But the timing of the reopening of Dennington coincided with a severe downturn in international dairy markets while farm gate prices rose by 30 per cent, he said.
"Southern farm gate prices have become out of step with the global dairy market," he said.
"Australian exported dairy products are now expensive compared to our competitors in the US and New Zealand".
Mr Anderson said supermarkets and consumers were increasingly choosing imported dairy products based on price, and were satisfied with the quality of the products.
"That doesn't bode well for the long-term sustainability of the Australian industry" he added.
He said ProviCo would seek to reduce costs, as it sought to diversify into a greater range of bio-nutritional products, in the next 18 months to two years.
"It's around processing as efficientaly as possible, right throughout the value chain, making sure we are doing things as efficiently and economically as possible," he said.
"We formed a strong relationship with SWDL from the outset, like us they are growing, and we take all the milk they produce.
"It has been an important partnership for us."
Andrew Miller
I'm a general reporter with Stock & Land, with a special interest in irrigation issues. I completed my cadetship, with the Age, in 1980. Over my career, I've worked for ABC radio news (Mt Isa, Qld) and at provincial and suburban newspapers.
I'm a general reporter with Stock & Land, with a special interest in irrigation issues. I completed my cadetship, with the Age, in 1980. Over my career, I've worked for ABC radio news (Mt Isa, Qld) and at provincial and suburban newspapers.
