Dairy

Opening price hurts farmers

by
June 21, 2017

MG supplier and dairy farmer Nathan Ferguson from Teal Point.

All Murray Goulburn supplier Nathan Ferguson wants to do is milk cows and make a decent living.

He would be happy to continue to do that with the processor he began his dairy journey with five years ago but an opening milk price well below other competitors means his business is looking at losing at least a $100000 this season, before he even puts the cups on a single cow.

Mr Ferguson, from Teal Point between Kerang and Koondrook, began supplying Murray Goulburn when he began his dairy journey back in 2012 and at the time he was glad to be supplying a co-op that knew who he was and treated him like a person, not just a number.

‘‘I have been with MG since I first started and they helped me get going in the industry. I have been a solid supporter of their store and was one of their top three customers. Nowadays they have cut credit and they have forgotten what they are and where they have come from,’’ Mr Ferguson said.

In 2015 Mr Ferguson shared up and signed a three-year contract to supply MG.

‘‘At the time we thought it was an awesome opportunity for our business, the new branding had been released, the business was rocking and share prices ended up getting to a high of $2.90.

‘‘It has since turned into a real challenge and now I am contracted to a milk company that is at least $100000 behind its nearest competitor.’’

Mr Ferguson said the cash difference was significant and was the difference between keeping his business going forward in the future.

‘‘I have done my budgets with my consultant and $4.70 just doesn’t work; $5.50 is where it’s at and I don’t run a fancy set-up. I don’t AI, I run bulls and have a pretty low vet bill, I have a one-man dairy and I don’t think I could run things much finer then I am now.

‘‘MG needed to come out with a better opening price. It’s not my fault the co-op is sitting where it is today. We have taken a hit with our shares, they are now 64 cents — and if I ran my business the way they ran theirs, they wouldn’t bail me out, so why do they expect it from me?’’

Mr Ferguson along with other suppliers is now looking at his legal options.

‘‘It is very stressful running a business with such tight margins. They say a measure of a man is not in what he owns, and if I end up back at the start then I guess there is a lot of people worse off than me — but it’s so frustrating that MG could take the opportunity for us to trade our way out of this mess away, because of a milk contract and a milk price well below the cost of production.

‘‘The industry has had to sit it out for one year but it looks like MG suppliers will have to sit it out longer — and who can afford to do that after the year we have just had?’’

Mr Ferguson believes MG has lost its way and has lost contact with its grass roots.

‘‘I can remember sitting in the supplier meeting at Cohuna a month before the price crash and hearing Gary Helou still talking about hitting $6/kg of milk solids — and look at us now.

‘‘The field staff seem to be the middle man for Melbourne and can’t make any decisions anymore. Back when I started, I had no shares, I had nothing, and yet I had more credit with the co-op than I do now.

‘‘I still am a loyal MG supplier and they helped me get a start, but loyalty doesn’t pay the bills anymore and we are all now left questioning whether or not we will even have a future.’’

—Sophie Baldwin.

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