DAIRYFARMERS around Mount Gambier supplying Dairy Farmers Milk Cooperative were notified on Monday that their milk would no longer be needed by the cooperative as of July 1.
Subscribe now for unlimited access to all our agricultural news
across the nation
or signup to continue reading
The milk up for grabs as a result of this will total 100 million litres. The move comes after Lion flagged its intentions to DFMC about how much milk it would need following the sale of its Murray Bridge and Jervois factories to United Dairy Power last year.
DFMC chairman Ian Zandstra said he had spoken with most of the affected farmers on Monday.
"They are free to go as of July 1, but they're in a competitive area where there is a strong demand for milk," he said.
"It's somewhat sad for DFMC to say we can't represent those farmers any more after years of good relationships."
DFMC and Lion have been in full-demand negotiations as the end of the 2011-12 season approaches.
Mr Zandstra told Stock Journal the two entities would be meeting with an independent expert next week as part of the dispute process.
As a result of the dispute, milk prices and the size of contracts will not be clear for DFMC suppliers by July 1.
"Farmers' milk will still be picked up and paid for, but unfortunately it's just a delayed process," he said.
In a letter to members, Mr Zandstra said the Lion management had tabled what they proposed to be the tier-one and tier-two milk price for the 2012-13 season.
He reassured DFMC suppliers that they have a guaranteed minimum milk price, which is underpinned by the Murray Goulburn traditional price.
Stock Journal contacted Lion for comment but it declined to respond.
