BSC agree­ment to be changed

Dairy News Australia - - NEWS -

THE BONLAC Sup­ply Com­pany and Fon­terra are work­ing on es­tab­lish­ing a new farmer rep­re­sen­ta­tive model, and will re­place the cur­rent BSC agree­ment. BSC chair­man and Echuca dairy farmer, Tony Mar­wood, said the sup­plier group has be­gun to change the way it works with Fon­terra over the last 6 months. He said the change was made to en­sure sup­pli­ers’ views form a greater part of the bi­monthly milk price dis­cus­sions. The BSC agree­ment be­gan in 2005, af­ter Fon­terra took to­tal con­trol of the Bonlac co­op­er­a­tive, and was due to ex­pire in 2019. The agree­ment in­cludes the clause that the far­m­gate milk price could not be less that that of­fered by Mur­ray Goul­burn. “BSC no longer sees the cur­rent Bench­mark Agree­ment against the largest Vic­to­rian pro­ces­sor Mur­ray Goul­burn as ap­pro­pri­ate in to­day’s Aus­tralian dairy mar­ket,” Mr Mar­wood said. “Our in­volve­ment with Fon­terra on this most re­cent price re­view is just one of a num­ber of steps BSC has un­der­way in pro­gress­ing towards a new and im­proved farmer rep­re­sen­ta­tion model.” Fon­terra an­nounced a 20¢/kg step-up, paid from July 1, less than a month into the sea­son. Mr Mar­wood said the step up was an im­por­tant step in help­ing to re­store sup­plier con­fi­dence and the prof­itabil­ity of their busi­nesses. “Whilst there has been no in­crease to the top end of the end of year fore­cast range of $5.80, we are very pleased with Fon­terra’s will­ing­ness to step up this early in the sea­son,” he said. ”It’s crit­i­cal to our cash flows and prof­itabil­ity that we not only re­ceive the best pos­si­ble price that is re­flec­tive of the mar­ket, but that we re­ceive it as early as pos­si­ble.”

Tony Mar­wood

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