Whorouly farmer tells dairy board to re­sign

Pro­ducer counts the cost of milk price de­ba­cle

North East & Goulburn Murray Farmer - - FRONT PAGE - BY JODIE FLEM­ING jflem­ing@ne­me­dia.com.au

WHOROULY fourth-gen­er­a­tion dairy farmer Rod New­ton owes his milk sup­plier $400,000.

Mur­ray Goul­burn – the com­pany which over-in­flated the price it would pay for milk in the face of a con­tract­ing global dairy mar­ket – in­sists on claw­ing back from Mr New­ton money it ad­vanced to him in a mar­ket that ev­ery­one knew was fall­ing.

Ev­ery­one – that is – ex­cept the co-op­er­a­tive’s board mem­bers.

Mr New­ton milks about 600 cows at peak on his owned and leased 650-hectare dairy farm south east of Wan­garatta.

He has sup­plied MG with 5.5 mil­lion litres of milk since last Au­gust af­ter he de­cided, with his fam­ily, to change pro­ces­sors af­ter sup­ply­ing to Dairy Farm­ers since 1970.

“I changed to MG be­cause I thought the in­dus­try needed a strong milk sup­plier like MG, so I bought enough shares and I am now locked in for the next three years,” Mr New­ton said.

“The funny thing is my Dad al­ways vowed he would never go to MG and I wish I had of lis­tened to him.”

Be­cause one of Aus­tralia’s largest dairy pro­ces­sors guar­an­teed that a price of $6 per kilo­gram of milk solids would re­main, Mr New­ton bor­rowed to buy feed to get him through the drought to en­sure his cows could con­tinue to pro­duce the great­est pos­si­ble milk vol­ume.

He also bor­rowed money so he could plant pas­ture to feed his cows over the win­ter months and to buy shares in MG when it floated on the stock ex­change last year.

It was, ac­cord­ing to Mr New­ton’s fi­nan­cial ad­vis­ers, “a good in­vest­ment”.

From July last year, it is al­leged that com­pany re­ports given to MG se­nior man­agers demon­strated that milk was suf­fer­ing big losses ev­ery week, but farm­ers were still be­ing paid the $6 per kg that MG promised they could eas­ily pay for 12 months.

The com­pany is now de­mand­ing the money back over three years with in­ter­est.

Mr New­ton de­scribes the news of the milk price cut as “mas­sive and gut wrench­ing”.

“We are a fairly es­tab­lished and rea­son­able-sized farm,” he said.

“Some land for sale re­cently came up so we bought a cou­ple of prop­er­ties which put our busi­ness at risk, but we needed to ex­pand.

“So the de­ci­sion to not only cut the milk price but that fact they want the money back cost us $330,000 overnight.

“The worst will be next year, try­ing to sur­vive and then still hav­ing two more years of lower milk prices and still hav­ing two years and three months of a con­tract I have to hon­our with (MG).

“We have no choice but to pay the money back be­cause we are un­der con­tract with them.”

Mr New­ton is adamant that those farm­ers sup­ply­ing milk to MG have to ques­tion the board about what went wrong and in turn, those board mem­bers need to pro­vide an an­swer as to what they are go­ing to do to change the way they will con­duct them­selves in the fu­ture.

“Sim­ply say­ing they didn’t know and that they are very sorry just doesn’t cut it,” Mr New­ton said.

“If they didn’t know what was go­ing on they are in­com­pe­tent.

“Ev­ery other dairy com­pany in the world pre­dicted lower prices, so what are they hid­ing and what are they go­ing to do to fix it to stream­line the busi­ness just like ev­ery farmer has had to do while they push all the debt back onto us.”

While Mr New­ton does not think that a class ac­tion is the an­swer to mak­ing the board mem­bers ac­count­able for their de­ci­sions, he is in­ter­ested in what the out­come of the Aus­tralian Com­pe­ti­tion and Con­sumer Com­mis­sion (ACCC) in­quiry might be.

“What we need now is some­one to be able to ar­tic­u­late where we all stand and put steps in place to move for­ward,” he said.

“If the board is found to be neg­li­gent – and in­cluded in that would be the in­for­ma­tion they pro­vided in their Pub­lic Dis­clo­sure State­ment – I would think ev­ery con­tract would now be null and void as peo­ple signed up on the ba­sis of the in­for­ma­tion in that doc­u­ment.

“If that is flawed, then how can it be en­forced?

“The board now has no re­spect in this in­dus­try and you can­not trust what they are say­ing or telling us,” Mr New­ton said.

Whether Mr New­ton will con­tinue to sup­ply to MG af­ter his con­tract is fin­ished is a ques­tion he can­not an­swer but he cer­tainly has a mes­sage he wants to send to the board.

“I have a ques­tion for any di­rec- tors that may read this,” he said.

“How can you look at your­self in the mir­ror and be part of the board and not step back and get some new blood in there that can move for­ward and who will be more open and hon­est for the fu­ture?

“These peo­ple have been in charge of a cor­rupt mess and al­lowed them­selves to be bul­lied into de­ci­sions and not done any­thing about it or stood up for the farm­ers.

“At least re­sign and let a fresh lot of eyes come in and look at it.

“There have been no checks and bal­ances and they gam­bled with our money.

“The in­dus­try needs a strong MG as they are the price set­ters, but we need the board to be strong and not run by yes men but by peo­ple who are re­al­ists.”

Ac­cord­ing to Mr New­ton the re­cently an­nounced fed­eral dairy as­sis­tance pack­age needs a lot more ex­pla­na­tion and he en­cour­ages ev­ery­one who has been af­fected by the price cuts to “keep talk­ing to friends and have them help you take your mind off it for a lit­tle while”.

“You know, what I re­ally don’t un­der­stand is that if MG were go­ing through a rough patch they could have told us in­stead of pre­tend­ing ev­ery­thing was okay,” he said.

“But in­stead, they put money into this in­fra­struc­ture pro­gram where there is no guar­an­tee, par­tic­u­larly in this en­vi­ron­ment where they should have pulled their heads in like farm­ers now have to.”

Mr New­ton said “those peo­ple in charge just kept steer­ing their course with­out ques­tion­ing it.”

He now wears the cost.

PHOTO: Marc Bongers

STAY­ING STRONG: Dairy farmer Rod New­ton is en­cour­ag­ing those af­fected by the milk price cuts to keep talk­ing to friends and have them help each other take their minds off it.

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