Act of stupidity by MG


THIS letter is addressed to Murray Goulburn (MG), and in support of Ned Clark’s letter (‘Dairy farmers need to take some control back’, Gippsland Times, June 7).

Firstly, we would like to applaud and thank the Aussie consumer for their loyalty and support by backing us with their feet and wallets in regards to buying branded milk instead of supermarket chain $1 per litre milk.

We read with disbelief the chairman of MG’s letter in the same issue.

That disbelief has now turned to anger, it’s no wonder the dairy industry is in turmoil, with people like that in charge.

It is our opinion that it is an act of stupidity to supply and package the milk to the supermarkets to undercut your own branded milk.

If the supermarkets want to sell $1 milk, they should buy and run their own dairy farms, bottling factories, and milk the cows themselves.

This, of course, won’t happen, as they are buying the milk for less than the cost of production.

How can supplying the supermarkets to sell milk for $1 be better for MG farmers than selling milk for $1.60 in Devondale packaging?

They (the MG board) were skiting a few months ago about how they had won a contract to supply a supermarket brand cheese.

A boon for their farmers.

They undercut Bega to get the contract, after Bega stated that they could not possibly tender any lower, and were looking at better ways to value add with the milk that would have been used to supply that contract.

MG is devaluing all of our dairy products with this ridiculous policy.

If that isn’t bad enough, MG are telling our loyal customers that they are wasting their time and money by paying a premium for the farmer brands, and boycotting the supermarket brands, and that this won’t help the farmers.

He (MG chairman Philip Tracy) should get a job with a fuel company and do some good for the country by helping to screw down the cost of fuel for all Australians.

If this contract is delivering a premium above the farm gate milk price, why are your farmers not reaping the benefits?

Is it a premium above the opening price from last year, or the recently announced cut price?

Mr Tracy contradicted himself in the second last paragraph by stating that “this downturn, which is delivering unsustainable milk prices to dairy farmers.”

The global market understandably fluctuates, but it is your willingness to devalue the domestic market prices that has ruined so many farmer’s lives.

When the global market price is low, we still had the domestic market to sustain us.

Not so, when the domestic prices are driven into the ground.

MG flooding the market with milk product that they can’t send overseas, has put monumental pressure on smaller processors, who now have to compete with these almost margin less prices.

To address another statement; “global commodity markets will rebalance in time, but the timing of that recovery is beyond our control.”

The situation in Australia is a lot worse now because of the opening price MG set at the start of last season.

MG, who is exposed to global markets, should have seen the writing on the wall and opened with a more realistic price.

MG is the price setter, and other companies follow suit. If the global market improved, step-ups are better than claw backs.

Farmers have spent and wasted money milking and feeding more grain to cows that they would have either culled or dried off earlier.

Many in drought affected areas may have chosen the option to dry off their whole herd, rather than spending a fortune on fodder, to produce milk which has added to the oversupply, and helped drive them further into debt.

A debt of which they will be now forced to repay over the next three years with interest.

How can Mr Tracy possibly state “We continue in our efforts to carry our suppliers through this downturn.”

Your suppliers and the rest of us are carrying you!

At present, the global price of milk powder is approximately $2,200 per tonne.

In your blue tag special catalogue, you are selling calf milk powder back to your suppliers at $4,000 per tonne.

Are you and the other MG board members the only people in the country who can’t see that the Australian public recognise the situation we are all in?

They are prepared to put their money where their mouths are, and pay a small premium for our milk and other dairy products, to keep the industry viable. In fact, they are supporting more and more Australian grown and produced products.

Keep up the good work, Aussie consumers!