Fac­ing up to the past

Shepparton News - Country News - - DAIRY NEWS - By Ge­off Adams

Fon­terra’s Aus­tralian leader says the com­pany’s treat­ment of farm­ers has changed since last year’s dis­as­trous price crash.

The New Zealand com­pany has been crit­i­cised by in­dus­try fig­ures and even its own sup­pli­ers for fol­low­ing Mur­ray Goul­burn’s dra­matic price cut and en­su­ing claw-back.

Speak­ing af­ter the open­ing of the new Fon­terra cheese plant at Stan­hope, Aus­tralian man­ag­ing di­rec­tor Rene De­doncker said the com­pany was in­ter­ested in mak­ing sure it did the right thing by farm­ers.

‘‘To do that we need to make sure we hon­our the right pric­ing and that we can speak openly and trans­par­ently to them,’’ Mr De­doncker said.

‘‘In the last 12 months that’s what we have done. We knew we had to be­have dif­fer­ently.’’

Mr De­doncker said Fon­terra’s milk in­flows had picked up but its pric­ing strat­egy had not changed.

‘‘The $5.50 is at­tract­ing farm­ers to Fon­terra. I think our be­haviour is also do­ing that as well.

‘‘We have com­pletely changed our be­haviour in the way we lis­ten to our farm­ing com­mu­nity and the de­ci­sions that we make.’’

Asked where the com­pany was po­si­tion­ing it­self with in­dus­try leader Mur­ray Goul­burn los­ing sup­pli­ers, Mr De­doncker said its am­bi­tion was not to be num­ber one, but it could end up tak­ing the lead.

‘‘We have a clear strat­egy and we are im­ple­ment­ing that strat­egy,’’ he said.

‘‘We may hap­pen to be the largest but that’s not our fo­cus.

‘‘Our fo­cus is to get the right amount of milk, cheese, whey, nu­tri­tion­als.

‘‘If the out­come is be­com­ing num­ber one, that’s what it will be.’’

Fon­terra opened early this sea­son with $5.30/kg of milk solids and then steppedup to $5.50 kg.

Mr De­doncker said Fon­terra was con­fi­dent the price was re­flec­tive of mar­ket forces.

‘‘But we won’t move early, we will only move when we know we have made those de­ci­sions that are re­turn­ing the earn­ings.

‘‘But we feel it will be a great year for farm­ers.’’

He said the po­ten­tial was to move to $5.80/kg MS this sea­son.

Mr De­doncker was ap­pointed to his po­si­tion just af­ter the milk price crash and ad­mit­ted that meet­ing face-to-face with farm­ers af­fected by the price cut was ‘‘bru­tal’’. ‘‘We’ve learnt a lot from that.’’ He said he was now of­fer­ing a dif­fer­ent ap­proach and the com­pany was ‘‘look­ing them in the eyes’’.

‘‘If we don’t take a step to­wards farm­ers and pro­tect their in­ter­ests there is go­ing to be a mas­sive prob­lem. We have to take shocks out.

‘‘Farm­ers want trans­parency and they want to know that the price they are get­ting re­flects what is go­ing on in the world.’’

He said the com­pany had im­proved its com­mu­ni­ca­tion with its sup­pli­ers, send­ing a four-page re­port out ev­ery four weeks.

Mr De­doncker said the com­pany had set a tar­get of in­creas­ing milk sup­ply to about 1.9 bil­lion litres and had achieved that in re­cent weeks.

‘‘Last year we fin­ished at 1.5 bil­lion litres and now we are track­ing closer to 2 bil­lion,’’ he said.

‘‘A lot of that is com­ing here to Stan­hope but much is also go­ing to Dar­num and to Cob­den and Sprey­ton in Tas­ma­nia.

‘‘That is cre­at­ing the net milk we need to run our fac­to­ries ef­fi­ciently and to de­liver profit at the farm gate.’’

Asked about the re­cent Se­nate com­mit­tee re­port on the dairy in­dus­try, Mr De­doncker said although the code of con­duct was vol­un­tary, any dairy player that did not hon­our that code would be called out and scru­ti­nised.

Although it was not en­force­able he didn’t see any party who would step out­side of it. He said the code should be ‘road tested’ first.

Mak­ing changes . . . Fon­terra’s Aus­tralian chief Rene De­doncker at the Stan­hope cheese plant open­ing. ‘‘We knew 12 months ago we had to be­have dif­fer­ently.’’

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