Year ahead: Increased competition for supply a benefit

Year ahead: Increased competition for supply a benefit

Dairy
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INCREASING processor competition was a highlight of the past 12 months, according to SA Dairyfarmers’ Association president John Hunt.

INCREASING processor competition was a highlight of the past 12 months, according to SA Dairyfarmers’ Association president John Hunt.

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TIMELY AID: SADA president John Hunt has welcomed increased processor competition.

TIMELY AID: SADA president John Hunt has welcomed increased processor competition.

“It was good to see Bestons and Union Dairy Company become stronger players in the demand for milk,” he said.

“Bestons opened with a higher price than most and have maintained it and have also continued their quality of cheese, picking up awards and market share.

“UDC have started to negotiate with farmers, as they have the capacity and need extra supply.

“It has been refreshing to see our other processors, including our artisan cheesemakers, looking for supply and growing markets.”

Mr Hunt said there was also good news with major Western Vic processor Warrnambool Cheese & Butter maintaining a strong opening price, and “reviewing the price upwards, not down”.

With the sale of Murray Goulburn to Canadian dairy giant Saputo, he said it was “sad” to see a farmers’ cooperative sell but could see few other options.

Looking forward into this year, Mr Hunt said there was plenty of opportunity to work with other states on common causes.

“At a national level, Australian Dairy Farmers are getting it together with a president and new chief executive officer who are focused on one industry, one voice,” he said.

“This can be challenging as every state has their own issues, which ADF are willing to lend their support and advice on, but nationally a lot of our issues are the same.”

The voluntary code of conduct, developed midway through last year, will be up for review this year.

“The voluntary code of conduct has been a good start to getting relationships between processor and farmer closer,” he said.

“It definitely needs the 12-month review as a few things need tweaking.

“We would still prefer a voluntary code to a mandatory one as we don’t want the code to be a blueprint for processors to follow.

“We still need the communication and partnership.”

Mr Hunt said there were still some key challenges for the dairy industry to face in the coming months.

“If the United States and Europe continue to ramp up their production, it will hurt us,” he said.

“It doesn’t seem to matter if we are exporting or (selling to the) domestic (market), the fluctuation in price affects both.

“The cost of production being continually on the rise still remains an issue unless we can pass some of those costs on.

“Power reliability and cost on its own is a big enough issue.”

A positive in coming months would be the launch of the SA dairy blueprint.

“We have to grow our industry and the first steps to doing that is to follow our strategic plan for the future, that leads us on to the action plan which all of industry have had the opportunity to participate in,” he said. 

“We have the ability to double our production in SA, to have better prices, transparency and partnerships with processors and retailers –  it is achievable.” 

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