Dairy farmers under siege
CASINO district dairy farmer Terry Toohey believes milk processors are undercutting each other and it is farmers who are paying the price.
The fourth-generation dairy farmer, and member of state and national dairy committees, said that he made the decision to part ways with the Lismore-based Norco dairy co-operative in August 2008.
Mr Toohey said he was disappointed his new processor, National Foods, was not local, but the decision was based on what was best for his business.
“Norco was lower paying,” Mr Toohey said.
Last week, Norco announced a three cent a litre price drop in the base rate it will pay its milk suppliers.
Norco chairman Greg McNamara said the price cut was a delayed reaction to the impact of the Global Fin-ancial Crisis on dairy product sales.
He said Norco suppliers had been protected for a time from the crisis because they were on contracts.
The average annual return was now set at 51 cents a litre, three cents lower than last year, he said.
Mr McNamara said farmers who had gone with other processing companies would be also coming off their contracts in the future and wouldalso face lower prices.
He said Norco worked hard to offer good prices for its members and that profits from the co-operative's operations were returned to farmers.
Norco expects to make more than $1 million worth of ‘step-up payments' to its 170 members this year, enabling them to share in the company's profits.
“Norco is in good shape,” he said.
Mr McNamara said the reality was that Norco had to respond to external market forces.
Supermarkets – often blamed for low milk prices at the farm gate – tried to ensure consumers received the best product they could at the best price, he said.
Mr McNamara said the outlook for local dairy farmers was positive and many were looking forward to a good year ahead.
“It's been wet so they won't have to buy expensive grains and can put away their own silage,” he said.