$1 milk a last straw for NSW milkmen

CAROLINE MARCUS
March 31, 2013
The Sunday Telegraph

THEY are the milkmen who refused to run with the herd.

More used to barns and milking machines than board rooms and business deals, it was the demand they slash another 4c from their already dwindling milk prices that finally spurred the dairy farmers of the Manning Valley to take on the middlemen and propose direct sales to Woolworths.

In January last year, milk processor Parmalat told the farmers on the mid north coast it had signed a new contract with the supermarket giant and they would have to sell milk for less.

The deal would have meant farmers made up to $40,000 less per million litres of milk, roughly the average amount produced annually by each farmer in the area.

Farmer Tim Bale, 54, who heads the collective bargaining group of 54 farmers in the area, wrote to each director of the Woolworths board saying the Parmalat contract was proof $1 milk being sold in supermarkets was harming their trade.

He soon received a call from Woolworths general manager Pat McEntee who offered to talk to the farmers. “Four of them came up in January last year and we showed them around a couple of farms and I suggested we could supply them milk,” Mr Bale said.

“Really, it was more an off-the-cuff comment and he said: ‘Well, you could and let’s explore that’.”

The farmers began having meetings with the retailer, contracted a solicitor and prepared a submission with the ACCC to deal directly with Woolworths, which was lodged on March 22. The proposed deal will mean milk will be sold straight to Woolworths, which will then pay to have it processed, instead of farmers selling to processors. The farmers expect to hear back from the regulator next weekend and, if approved, can start negotiations with Woolworths.

Mr Bale said the deal could spell the end of 13 years of struggles since the dairy industry was deregulated. Like many farmers, he was forced to supplement his ever-dwindling income with other work, which in his case meant buying a real estate business.

Julian Biega, a 54-year-old farmer, said poor weather conditions, the carbon tax and an epidemic of “three-day sickness”, a mosquito-borne virus that strikes cows, had compounded local farmers’ hardships.

Mr McEntee said he was keen to sign a deal but would not say whether the retailer was willing to meet the price demands of the farmers, who want 50 per cent or more from milk sales.

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