Lion Promises Pay Rise for Dairy Farmers06 November 2012
AUSTRALIA- Dairy farmers in New South Wales NSW and south east Queensland will get a price rise for their milk - after months of complaining of low returns.
The milk processor Lion says it will lift the price of Tier 2 milk from February next year, reports ABC news.
Murray Jeffrey, director of procurement at Lion says the company realised it can buy more milk, for a better price.
"Given that there's been a steady decrease in volume over the last two or three months it's allowed us to purchase Tier 2 milk at Tier one prices in South East Queensland and NSW."
Tier 2 milk is currently 15 cents per litre, and by next year it will be the same as Tier 1 milk, which is 47.5 cents a litre for northern NSW and southeast Queensland.
Tasmanian suppliers will get an increase for Tier 2 milk to match Tier 1 from January to June 2013. Victoria and South Australia were unaffected by T2 prices.
Dairy farmers say they knew there would be a shortage of milk in winter, and Lion should have given farmers better price signals, earlier.
Chairman of Premium Milk, John Cochrane wont comment on the announcement by Lion, that it will treble the price it pays for Tier 2 or manufacturing milk from next February.
However he says in practical terms it will be difficult for Queensland farmers to meet the increased demand.
"Our market requires the same amount of milk every day of the year, but to prodcue more milk in autumn is very, very costly because the changing of the season means different grasses and it is not the right biological time of the year for a cow to produce milk."
"For us to meet the increased demand, we have got to do one of two things, put a calving pattern in place that means the cows produce milk in autumn, alternatively we have to milk a lot more cows just to keep a level supply for consumers, " he said.
Mr Cochrane says farmers are very stressed att he moment and while November is the wrong time of year to sell cows, there are around a 1000, head on the market.
Ian Zandstra, chair of the Dairy Farmers Milk Cooperative, says it's close to finding alternative buyers for milk who pay more than Lion.
"We feel that milk is worth more than 15 cents a litre on farm through those spring months.
"We just have to find a better value for that milk.
"And if Lion are not careful, and I think that's their nervousness now with announcing early, there's a great risk of the milk supply shrinking to a risky volume for Lion."
TheCattleSite News Desk