Call for more fat to earn fair price

Tasmanian Country - - NEWS -

A NEW re­port by one of the coun­try’s ma­jor dairy-cat­tle breed groups is call­ing for an over­haul of milk-pay­ment sys­tems.

The re­port by Jersey Aus­tralia was funded through Fed­eral Gov­ern­ment’s Farm­ing To­gether pro­gram.

It found that the cur­rent pay­ment sys­tems used by ma­jor dairy pro­ces­sors were highly com­pli­cated, out­dated and did not re­flect the changes in global mar­ket con­di­tions.

At present the ma­jor pro­ces­sors pay farm­ers a dif­fer­ent price for the pro­tein and but­ter fat con­tent of their milk.

How­ever, the re­port states that this dis­ad­van­tages some pro­duc­ers and ap­ply­ing the same price for both but­ter fat and pro­tein would re­ward dairy farm­ers sup­ply­ing high­com­po­nent milk.

Jersey Aus­tralia board mem­ber and Rin­ga­rooma dairy farmer Jane Sykes said while the re­port had been com­mis­sioned by a breed group, the breed of a dairy herd was ir­rel­e­vant when it came to how farm­ers are paid.

“The cur­rent sys­tem dates back to the 1980s when but­ter fat was the prod­uct most dif­fi­cult to find a mar­ket for, but things have changed a lot since then,” she said.

“What we would like to see is for farm­ers who are pro­duc­ing high-com­po­nent milk to be get­ting paid prop­erly for it, re­gard­less of the breed of cows they have.”

Miss Sykes said this type of pay­ment sys­tem had al­ready been adopted in places such as New Zealand.

In Tas­ma­nia, Cad­bury also made the move at the start of this sea­son to start pay­ing its sup­pli­ers equal prices for both but­ter fat and pro­tein.

Cur­rently, Fon­terra pays its Aus­tralian sup­pli­ers at a ra­tio of 1.9 to 1 ra­tion for pro­tein com­pared to but­ter fat.

The re­port has also rec­om­mended a vol­ume charge to pe­nalise milk sup­plied with lower lev­els of milk solids.

The re­port says pric­ing mech­a­nisms are only a means for pay­ing for milk and the breakup of com­po­nents and other in­cen­tives does not nec­es­sar­ily re­late to mar­ket con­di­tions.

“It’s not go­ing to be easy and there are go­ing to be peo­ple with dif­fer­ent opin­ions about this, but we need to start the con­ver­sa­tion and have a re­ally good look at how we’re be­ing paid,” Miss Sykes said.

Tas­ma­nian Farm­ers and Gra­ziers As­so­ci­a­tion dairy coun­cil chair­man Andrew Lester said there had al­ready been some in­dus­try dis­cus­sion.

“Some com­pa­nies like Fon­terra have been look­ing to go this way be­cause that’s what they do in New Zealand.

“If there’s some way we can put more fo­cus on this or move things along a bit faster that’s some­thing I’d sup­port.”

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