When you pour milk into your coffee in the morning, spare a thought for the farmers getting up before dawn, seven days a week for ten months of the year, all to produce milk for the masses.
And this year they will be getting paid less to do it.
After keeping tight-lipped for weeks, Australia's processors have released their price offerings for the upcoming season and it is not good.
Fonterra Australia announced a 10 per cent cut to its farmgate milk price, with an opening offering of $8.65 per kilogram of milk solids, or $0.65 a litre.
Managing director Rene Dedoncker said it was higher than the international market.
"We are proud of the relationships we have built with our farmer suppliers, and we look forward to continuing our partnership with them in the season ahead," he said.
Victorian dairy farmer Greg Peddle milks about 800 cows in Yarram, south Gippsland, and says Fonterra's pursuit of profit is leaving dairy farmers on the back foot.
"It feels like Fonterra's got short memories. They forgot what it's like to actually lead the pack," he said.
"And if $8.65 is leading the pack, well, our industry's in a lot of trouble.
"This is what they've done in the past … bring up the rear and try to maximise their profits that way, but that's no way to be in the Australian dairy industry at the moment.
"They need to be out front leading to attract supply."
A $270,00 hit
Fonterra Australia Suppliers Council chairperson Alan Davenport said it was "disappointing but not surprising" news.
"So … the average dairy farm in Tasmania was producing 300,000 kilograms of milk solids," he said.
"Well it's going to be a $270,000 [drop in income].
"Given normal seasonal conditions, we should still be able to make reasonable returns at those prices."
Grim news for farmers
Bulla was first out of the gate this week with its prices offering a "starting position" of $8.80 to $9.90 per kilo of milk solids.
Cadbury parent Mondelez told farmers on Monday it would offer $8.73 per kilo or $0.66 per litre to farmers who supplied them exclusively, and $7.93 or $0.60 per litre for non-exclusive contracts.
Canadian dairy giant Saputo left it a couple of hours before the 2pm deadline to announce an opening weighted average of $8.90 to $9.05, which is about 6 per cent less than last season's $9.50 per kilogram of milk solids.
Fonterra was not far behind with its $8.65 price for farmers, which is about 65 cents per litre.
Farmgate milk prices
Company |
Per Litre |
Kg/Milk Solids |
|---|---|---|
Fonterra |
$0.65 |
$8.65 |
Saputo |
$0.67 - $0.68 |
$8.90 - $$9.05 |
Bulla |
$0.66 - $0.74 |
$8.80 - $9.90 |
Cadbury |
$0.60 - $0.66 |
$7.93 - $8.73 |
Norco |
$0.88 |
$12.22 |
ADFC |
$0.68 |
$9.05 |
ACM |
$0.65 - $0.72 |
$8.69 - $9.52 |
Customers 'understand'
Burnie cafe owner Nathan Stott and his regular, early coffee crowd in Tasmania's north-west were sipping their cafe lattes and flat whites this morning as farmers anxiously waited to learn what they would be paid over the coming season.
"I know full well it's a hard life. They work hard … they're up before dawn," Mr Stott said.
"Customers understand [when the price of coffees goes up], they're hurting too.
"They get that everyone is squeezed at the moment."
