Dairy’s future looking brighter

A mood of cautious optimism is creeping through the dairy industry in the run-up to Christmas, according to Shaughn Morgan, CEO of advocacy group Dairy Connect.

“It’s taken around 18 months for producers to begin to recover from the price cut shocks delivered by the Murray Goulburn Co-operative and by Fonterra in April 2016 but there is still a way to go,” he said

“Moving around the dairy valleys talking to producers, it is clear to me that they have begun to form a new sense of quiet confidence in the future.

“The reasons for this include the Saputo bid for Murray Goulburn and a sense MG may be in the capable hands of a successful Canadian family-owned international enterprise in the future.

“Producers have been pleased with that they have seen happening under Saputo at Warrnambool Cheese and Butter and they are getting a sense of the big picture across the sector beyond 2018.”

Saputo director Lino Saputo Jr told ABC Rural the strategy for MG post-takeover was to get Murray Goulburn to get back to processing 2.5 billion litres of fresh drinking milk.

The company planned to get Murray Goulburn’s seven processing plants back to capacity and operating efficiently again but this was governed by shrinking milk availability in the regions.

“We are taking on this business with a little bit of risk but over the past 20 years we’ve made 27 acquisitions”, he said.

Warrnambool Cheese and Butter supplier Russ Roberts said in a Facebook post recently:

“The WCB experience has been positive; the company has good ethics; and my personal experience with the company as a contractor has been positive; the Australian dairy industry could do a whole lot worse.”

Meanwhile the Australian Securities and Investments commission has handed down the outcome of its review into Murray Goulburn’s behaviour in March and April 2016.

ASIC said it had started Federal Court proceedings against MG alleging that from March 22 to April 27 last year, the co-op had failed to notify the ASX it was unlikely to achieve trading forecasts it had made in February.

Murray Goulburn has said it had reached a $650,000 settlement with ASIC over its behaviour last year in the lead-up to a profit downgrade and cut in milk prices paid to farmers.

“We still have many issues to address over the coming months, including the completion of the sale of Murray Goulburn; the review of the interim report of the ACCC into the dairy industry, prior to the final report next year; ensuring appropriate use of the term ‘milk’; an appropriate Code that addresses the concerns of producers and processors thus ensuring transparency, openness and restoring trust within the industry”, Shaughn concluded.



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