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Dairy farmers staying loyal to dairy co-operative Murrary Goulburn
August 16, 2017

Murray Goulburn loyalists are clinging to the embattled dairy co-operative, despite lucrative offers from rivals to jump ship.

That loyalty was tested sorely again this week as milk cheques hit farmers’ accounts, exposing the gap between MG’s seasonal forecast of $5.20-$5.50/kg of milk solids and offers of $5.50-$5.90/kg from its rivals.

Former New Zealand dairy farmer and MG supplier Craig Dettling said he was remaining loyal to the co-op, despite lower farmgate milk prices.

While the Macarthur dairy farmer understands why some MG suppliers have jumped ship, he said he and others were sticking with the co-operative to protect their own and the industry’s future.

“Every strong dairying nation has a co-operative at its foundation,” Mr Dettling said.

The board of the Macalister Demonstration Farm, which is a co-operative, has written an open letter to the MG board stating that it would remain loyal to the co-operative, despite “a very strong offer from another milk processor on the table, showing a difference of $100,000-plus in milk income in 2017-18”.

“While our trust (in MG) has been battered, we still have enough faith that MG can get this right, by acknowledging its roots and set operating parameters that have all of its farmer shareholders secure and successful,” the Macalister Farm’s letter said.

But not everyone can choose to leave MG, with one supplier saying many were locked in by debt.

Other suppliers that have left MG, who did not wish to be named, said their decision to leave was about survival.

“It’s disgusting what’s happened (over the milk price clawback), but we’re all in survival mode,” one former MG supplier said.

Many former MG suppliers still have significant investments tied up in MG shares and are wondering whether the co-operative will survive beyond Christmas.

“Being a co-operative you can’t turn it around in a hurry, given you need 90 per cent of suppliers to vote (on any structural reform),” a former MG supplier said.

 

Source: The Weekly Times



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