The Australian Competition and Consumer Commission (ACCC) has issued an infringement notice to the Dairy Farmers Milk Co-operative (DFMC) for a breach of the Dairy Code of Conduct.

Under the Code, all information on milk supply agreements must be made publicly available by 2pm on 1 June. The technical breach related to publishing obligations as there was a delay of nearly an hour in sharing the standard form agreements on the DFMC website.

Importantly all DFMC farmer members and interested parties had access to all farmgate milk pricing schedules and supply conditions by the 2pm deadline on 1 June.

DFMC acknowledges and apologises to our famer members and the ACCC for the breach.

We have worked openly and constructively with ACCC staff to address the issues raised in the infringement notice.

With a small management team, DFMC manages more than 20 different farmgate milk supply agreements and is now undertaking a review of all processes and timelines associated with the requirements of the Code, with a view to making the necessary changes to ensure compliance in 2022.

The DFMC independent director and Chair of the Audit and Risk Committee will guide this review process and present the outcomes to the DFMC Board.

DFMC continues to be a strong supporter of the Code and the principles underpinning its development.

Media enquiries

Gabrielle Sheehan | gabrielle@curriecommunications.com.au

Springton SA suppliers Kym and Sandy Rathjen hosted a Dairy SA Calf Health day in late February.

Well attended by 40 farmers from across the Barossa and Mid North, presenters Cindy Lucas and Dario Mendoza brought attendees up to date with the latest in low-stress calf rearing and disbudding techniques in the comfort of the Rathjen’s new shearing shed.

SA Director Sandy Rathjen then spoke on how their operation goes about rearing the healthiest possible calves that develop into well-grown replacements for their 220 strong registered Holstein herd.

Attendees then enjoyed a delicious barbecue and of course some Farmers Union Iced Coffee provided by DFMC.

Originally, we excitedly planned to hold the Convention, Quality Awards presentation and AGM in Far North Queensland this year. But with the pandemic we clearly needed to rejig our plans and put together the AGM to accommodate the various travel and gathering restrictions that are currently in place.

Fortunately, our co-operative’s rules accommodate for a general meeting held in multiple locations linked by on-line conferencing.  There are clearly some differences and obligations in how the meeting must be run, including that any speaker must be able to be heard by all others present at each location.  For those of you inclined to read the details, the DFMC Rules are available on our website at https://dfmc.org.au/operation/dfmc-constitution/ – Part 4, Division 2 Conduct of General Meetings on page 22.

We are planning to host the meeting as an online conference using Microsoft Teams from our Geelong offices on November 17 and have satellite sites for members to attend with DFMC staff, Directors or WRAC members managing venues.  So, whilst the event in FNQ would have been a terrific opportunity for members to visit a beautiful and unique dairying region, this format will afford more members the ability to participate via satellite sites.

In addition, members will also be able to participate remotely via the online conferencing system from your own home or business. However members participating via their own home or business will be attending the meeting as a guest and will only be able to vote by proxy. In the interests of public health and safety, we think it best if most people participate remotely and do not physically attend the meeting.

Will I be able to vote?

Yes. If you can physically attend the Geelong office or one of the satellite sites you will be able to vote as we will have nominated scrutineers to formally record the “show of hands” or indeed a more formal poll if called. If you participate remotely from your own home or business, you will only be able to vote by proxy.

Will I be able to speak at the meeting or ask questions of the board?

Yes. The platform we plan to use has very good functionality to indicate you wish to speak.  Protocols will be announced before the meeting and the Chairman will manage the questions in a manner similar to a physical meeting.  All attendees will be able to hear your question. The Standing Orders at General Meetings (Item 53 of the Rules) will be adhered to, however, in accordance with DFMC’s Rules, the Chairman may depart from the Standing Orders if this is for the benefit of the members or the Co-operative as a whole.

Will there be any special or unusual co-operative issues voted on at the meeting?

No. It is anticipated that the meeting will only address and vote on “ordinary business” such as the minutes of the last general meeting and the audited financial statements for the previous financial year. These are outlined in Section 49(1) of the Rules.

Covid-19 restrictions will need to be complied with.

In order to ensure everyone remains safe, we will need to comply with any Covid-19 requirements such as social distancing and limits in respect of public gatherings at the Geelong office and each satellite site of the AGM. Accordingly, if you are planning to attend in person at one of the locations, we will ask you to pre-register prior to the meeting.

In due course we will share specifics on where, how, and when with all members via mail including formal meeting notices and proxy forms.  Of course, if you have any questions please contact Tony, Dom, Dan or Mark.

 

DFMC recently made representation to the latest Dairy Senate Inquiry. The matter was referred to the Rural and Regional Affairs and Transport References Committee in October 2019 for inquiry and the final report is now set down for November 2020.

The inquiry is into the performance of Australia’s dairy industry and the profitability of Australian dairy farmers since deregulation in 2000, with particular reference to:

1. the ability of Dairy Australia to act independently and support the best interests of both farmers and processors;
2. the accuracy of statistical data collected by Dairy Australia and the Australian Bureau of Statistics;
3. the funding of Dairy Australia and the extent of its consultation and engagement on the expenditure of levies revenue;
4. the merits of tasking the ACCC to investigate how it can regulate the price of milk per litre paid by processors to dairy farmers to ensure a viable dairy industry;
5. alternative approaches to supporting a viable dairy sector;
6. the introduction of a mandatory industry code of practice; and
7. any related matters.

The DFMC submission was made in person by Chairman Andrew Burnett and separate contributions from DFMC farmers from far north Queensland James Geraghty and Johnny Gallo.  The following is a combined excerpt from Andrew’s submission.

It is DFMC’s view the major retailers have the ability to “loss lead” in some regions on a couple of product lines like milk, and make it up from the other 40,000 or more products lines sold.   Further to this the cost of servicing smaller regional retail outlets is clearly much higher than metropolitan areas. 

Generic milk now saturates the market with coffee shops, restaurants and school tuckshops using Coles and Woolworths as a wholesaler as it is cheaper to buy milk there than have it delivered.    Shelf space, internal restocking and re-ordering policies all influence and manipulate the volume of generic milk that is sold in comparison to branded milk.  Is this an abuse of market power, dumping, loss leading?

The dairy industry has been impacted materially from this national retail pricing approach. Acknowledging the different farming systems, farm sizes and regional, climatic issues, equals greater cost of production.  Queensland has a farm gate price approximately 15cpl higher than Victoria.  When coupled with a large regional footprint driving distribution costs higher, the fresh milk supply chain is not sustainable.  The national retail price is actually lower than the cost to supply milk in and processors, and in turn farmers, are losing millions of dollars to stay in this market.

When I read through ACCC guidelines and legislation there is little to no reference to state or regional boundaries or acknowledgment of the difference in markets.  It could be suggested that there are different markets for dairy commodities and fresh drinking milk, which has a more regional boundary for markets.   The ACCC did find in some regions milk was sold at a loss.  I believe that the “test” for dumping, loss leading and the abuse of market power, needs to be carried out on a state by state basis.

The full transcripts are available here.

Running out of space! Suppliers Ray Perkins and Shirleen Evans from Laceby near Wangaratta are going to need a new display board to accommodate another Gold Star Award from Dairy Australia.

Awarded to the Top 100 BMCC Dairy Farms in Australia, this makes five years in a row for the north-east Victorian couple who began supplying DFMC in 2017.

Milking around 150 cows in a mainly Autumn calving herd on around 350 acres, the couple attribute their success to attention to detail when it comes to udder and teat health.

“We’re not a large herd so we can do it all ourselves and keep a pretty good eye on things,” Ray said.

Both Shirl and Ray have done Dairy Australia’s Cups On – Cups Off course and believe the extra information provided has lifted their understanding of mastitis management.

“Correct teat spraying is absolutely critical in managing mastitis,” Ray said.

“Good laneways, shed entry and exit areas are a big focus as well.”

“We don’t set out each season with an award like this as our target, but it is nice when all the bits you do around the place make it happen in the end.”

Producing high quality milk, and recognising it, is important for DFMC.

Well done to the suppliers below, led by Ray and Shirleen of Loxby Brown Swiss, for the high-quality milk produced this year so far.

The best five Bulk Milk Cell Counts (BMCC) for the year to date, based on the average of 10 day periods from each region are:

Loxby Brown Swiss	Victoria	Ray Perkins & Shirleen Evans	Oxley	83,388
Glencoe Estates	NSW	Steve Raison	Kiama	109,691
Manna Farm Holsteins	SA	Ian & Nikki Wilcox	Yankalilla	113,823
Elmhurst Trust	Vic	Barton Family	Kancoona	114,823
McGregor Farming	FNQ	Malcom & Jane McGregor	Malanda	125,398

Numurkah supplier Jim Dealy has welcomed the changes to the DFMC loans eligibility, which now give members the opportunity to borrow funds for everyday business proposals, rather than just adverse circumstances.

Jim and his wife Barbara, along with sons Ryan and Greg, will milk nearly 1200 cows on their 3500 acres at Numurkah this season.

The Dealys have used DFMC loans over the last two years to strategically purchase both hay and temporary water.

“We purchased 500 megs of water in March 2019 that set our pastures up well,” Jim said. “When the rain kick started in May we were well advanced.”

“Then in spring when water was too expensive, we locked in our hay supplies to see us through the summer.”

Jim says the DMFC loans were essential in planning for the future.

“Both times we were able to use the DFMC loans to lock in a price to make sure we had what we needed squared away.

“It’s put us in a pretty good position this year and now we hope to benefit from the high milk prices for the rest of the season.”

Like many farmers, the Dealys have become frustrated at how long banks can take to gather information and assess a loan proposal.

“Farmers know a good deal when they see it – we’ve got numbers running around in our head all the time,“ Jim said.

“So when an opportunity presents to lock in an input at the right price, it’s good to know we can make an application and get funds quickly.

“It feels like we’re putting a case to people who actually understand what we’re talking about.”

Always a glass half-full sort of farmer, Jim is confident that the dairy industry can ride out the coronavirus crisis in reasonable shape.

“Farmers are pretty fortunate in that we can go about our business pretty much as usual and there is still demand for what we are producing – and we still get paid for it!”

While Jim acknowledges the potential for prices to retract in the coming year, he is still optimistic about dairying in the Goulburn Valley.

“An average season and a bit more allocation would see us through,” he reckons. “But if we could get to $6.50, it would still be pretty handy.”

Further information about DFMC Supplier loans can be found at https://dfmc.org.au/services/

Former DFMC Chair, Duncan McInnes has been awarded a Medal of the Order of Australia (OAM) in the Australia Day Honours this year. The medal recognises Australians who have demonstrated service worthy of particular recognition.

Duncan was recognised for his service to the dairy industry, agricultural show societies and the community.

He described receiving the award as a very humbling and proud moment. He thanked his wife, Mary, and daughters, Megan, Heather, Kirsten and Ruth for supporting him.

“They missed out on different things, family life and such, from the amount of time I put into dairy organisations,” he said. “It was a downside for them at times, but credit to them.”

Duncan, who has lived in Radford in the Scenic Rim region of south-east Queensland his whole life, runs 500 milking cows that produce around four million litres of milk a year.

Duncan’s community spirit and involvement started in his teenage years when he joined his local rural youth club at age 17.

“I’ve always worked,” he said. “I enjoyed helping out. It was probably a flow on from rural youth, that started off the community service side of things.”

In 1970 Duncan became a member of the Queensland Dairy Farmers’ Organisation and has spent the past 50 years serving the dairy community through various local, state and national industry organisations.

Duncan was Director of DFMC at its inception in 2004 until 2017 and Chairman from 2013 to 2017.

“The idea of the DFMC when it started was to look out for the farmers and make sure their voices are heard. And still today DFMC is representing its members, like in milk pricing negotiations.

“Looking after farmers is the name of the game. It’s important that all of their voices are heard.”

Duncan has been a Councillor in the Royal National Agricultural and Industrial Association of Queensland since 2011. He is a member of several committees, and he is Chairman of the Dairy Cattle and Goat Committees.

“Some people in the dairy industry are doing it tough at the moment with the different conditions around Australia, but I believe they’ll get through it and live to fight another day. We been through some rough patches, and hopefully it’s a bit brighter moving forward.”