Call for a fair share of fat pay

Tasmanian Country - - THE STOCK REPORT -

AUS­TRALIAN dairy farm­ers say they are be­ing un­der­paid for fat de­spite a global hike in but­ter prices.

Global but­ter prices have surged from $US4000 a tonne 12 months ago to al­most $US6000 a tonne now, while skim milk pow­der has been bogged down at $US2000 to $US2500 since late 2014.

Yet Aus­tralian dairy pro­ces­sors con­tinue to pay farm­ers two to 2½ times more for pro­tein than fat, lead­ing some to ques­tion if lo­cal dairy man­u­fac­tur­ers are cross-sub­si­dis­ing pro­tein pro­duc­tion.

Across the Tas­man Sea, Fed­er­ated Farm­ers New Zealand vice pres­i­dent An­drew Hog­gard said his fat-to-pro­tein pric­ing ra­tio was more bal­anced than that in Aus­tralia.

Jersey Aus­tralia pres­i­dent Chris McKen­zie said War­rnam­bool Cheese and But­ter was pay­ing just $3.30/kg for fat but $8.25/kg for pro­tein.

Mr McKen­zie said he was con­cerned fat was be­ing used to sub­sidise pro­tein pro­duc­tion, which dis­ad­van­taged Jersey pro­duc­ers.

“It’s just rob­bing pay Paul,” he said.

Mr McKen­zie queried how much was be­ing taken out of the global but­ter price to cover the costs of a strat­egy that has Peter to been fo­cused pow­der.

“We’ve ended up with far­m­gate pric­ing that’s not giv­ing us the true value of the prod­ucts the world de­mands.”

Mr McKen­zie said milk prices needed to be fat­tened up, even if it meant dis­ad­van­tag­ing some herds.

While Jer­seys and some mixed-breed herds can pro­duce milk at 5 per cent fat or more, many Hol­stein herds are pump­ing out milk at lit­tle more than 3 per cent fat.

“If it [the fat-to-pro­tein pric­ing ra­tio] was re­bal­anced we would see more mixed breed herds as we be­came more aware of on-farm costs,” Mr Mcken­zie said.

One in­dus­try an­a­lyst said it was clear fat prices needed to rise but this would put pres­sure on larger dairy herds.

Aus­tralian Dairy Prod­ucts Fed­er­a­tion ex­ec­u­tive of­fi­cer Peter Stahle said tra­di­tion had de­ter­mined the price dif­fer­en­tial be­tween but­ter­fat and pro­tein at the far­m­gate.

He said the dif­fer­en­tial was an issue, given cur­rent de­mand for but­ter­fat, but any change would have to be im­ple­mented with “care­ful, close con­sid­er­a­tion with both sides of the dairy fence”. on skim milk

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