FARM FRESH: Devondale Murray Goulburn director Ken Jones said his nine-member board, which has seven dairy farmers on it, shares the pain of its suppliers hurt by the recent milk price cut. Picture: ELENOR TEDENBORGLONG-serving Devondale Murray Goulburn director Ken Jones said market pressure forced the dairy co-operative to make the “very, very harddecision” tocut its farm gate price to farmers.
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The Kergunyah dairy farmer, who has been a director for seven and ahalf years and served asdeputy chairman since 2011, said the board became aware onlyin April expected sales into China would fall short of forecasts.

An over-production in theinternational milk market, triggered by lifting of European Union subsidies and low feed and production costs in the US, had also hurt Australian exporters.

“A lot of people are reliant on Murray Goulburn,” Mr Jones said. “…Regrettably any action that Murray Goulburn takes has a very significant flow-on effect to farmers and rural communities where we trade.

“We trade right throughout Victoria and south-east Australia so it does have a significant impact, and we as a board and the business is very aware of that.”

Murray Goulburn holds 35 per cent of Australia’s milk production market and in the past three years has been transforming the business from a commodity-based one (milk) to a value added-based one (focusing on products such as yoghurt, cheese and milk powder).

To raise money to upgrade processing plants Murray Goulburn listed a unit trust on the stock market.

“We’re all farmers.Every decision we make,as directors, we’re affected the same as everyone else in the supply chain,” he said.

“We’re satisfied that we’ve done our task in this particular issue, there’s no doubt about that…we’re no different than any other investment and people take risks in thesharemarket, that’s really what it amounts to.We believe our disclosures were all satisfactory.”

Dairy farmers in full production for the autumn period (April-June) will be hardesthit by the price cut.

The cost of production for a litre of milk in the North East is in the range of 31-36c, due to higher rainfall and good grazing pasture.

But that cost is closer to 43-45c a litrein other areas, such as Finley, Deniliquin and Berrigan, which must buy in expensivewater and feed.Those producers would be hardest hit by the cut.

Mr Jones did not want to comment on the pricing actionof major supermarkets such as Coles, but urged consumers to stick by Australian farmers by buying local.

“This is an Australian-owned business, we’ve got 5000 people’s livelihoodsat stake, the best thing anyone can do is buy our Devondale products off the shelf,” he said.

“If people want to support us and support our farmers and support employment, that’s the critical thing.

“Ninety-nine per cent of the revenue that comes into MG is distributed to Australians.”

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