“Victorian dairy leaders have lambasted Saputo for comments by one of its leading executives hoping lower Australian farmgate milk prices “will stick”.
Saputo’s chief financial officer, Maxime Therrien made the comments during an investor briefing, earlier this month. Saputo, along with other Australian processors, has cut farmgate milk prices by 10-16 per cent this season – it’s average weighted price is $8-$8.15 a kilogram milk solids, down from $9.30/kg MS.
Mr Therrien’s comments were heavily criticised by Victorian dairy leaders and a south-western farmers. Dairy Farmers Victoria president Mark Billing, Larpent, said the comments showed a lack of understanding of what was happening in the Australian industry.
“Here we have a multinational company that treats their dairy farmers, almost with disdain,” Mr Billing said. “It would be nice to think the local management has a better understanding. “It reminds me of some comments, made by Fonterra, back in 2016.”
In 2016 Fonterra and the former Murray-Goulburn co-operative clawed back milk payments from farmers. Mr Billing said history had shown comments like that would have an impact on Saputo’s milk volumes, in the future. “Who wants to supply a company that has that sort of thinking?” he said.
It was “pretty short sighted” to make such comments, without an understanding of local conditions and the high cost of production. “If I was a Saputo supplier, I’d be looking at alternatives at the end of my current contract,” he said. Under the Dairy Code, farmers were locked into contracts for the current season.
United Dairyfarmers of Victoria president Bernie Free, Winslow, said while he hadn’t heard any farmers saying they’d be leaving Saputo – “I am sure there would be a lot of farms seriously considering their next move.
“Trust goes both ways – these factories seem to want trust to run one way. “At the start of the season, they all spouted that as soon as a step up would be available, it would be given. “These words seem to say Saputo has a different attitude than they had signalled at the start of the year.”
He said other processors were likely to “keep their mouths shut” but it gave them an understanding of where Saputo was when it came to milk pricing.
“You just wonder what they were trying to do?”
Woolsthorpe dairy farmer Brian McLaren said “nothing has changed since the Murray-Goulburn days – they are just trying to screw us”.
He is running a 700 head herd and said while he would stay loyal to Saputo, it did make him question why he remained in dairying. “You have to question whether it is worth doing?” he said. “You know, everybody has to make a dollar,” he said.
“At $7.15 a kilogram/Milk Solids and a truckload of hay coming in the gate every time you look up – because it won’t rain – it just makes it a lot more difficult and just makes you question what you are doing and why,” Mr McLaren said. “Why would you encourage anyone to get involved (in the industry)? “They (processors) don’t care about their suppliers – they’ll tell you they do, but they don’t,”
He said processors wanted the cheapest possible milk, to make as much money as they could, at the expense of the farmer. “I have good relationships with my hay sources, there is no issue sourcing it, it’s just paying for it at $340 a tonne,” he said.”
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