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United Dairyfarmers criticises dairy giant, supplier

Fonterra MilkFonterra has announced its opening milk price yesterday at $5.30 per kilogram, which was praised by the United Dairyfarmers of Victoria (UDV).

However, they have also criticised the dairy giant and Bonlac Supply Company for public statements indicating a higher available opening price of $5.70/kgMS.

The higher milk price comes from a 40 cent loyalty payment borrowed from future earnings as a way of compensating existing, retiring or recommencing suppliers for a disastrous 2015/16 season.

UDV president Adam Jenkins said they were alarmed with the comments and demanded both companies to be transparent in setting their opening price and promoting it to suppliers.

“Fonterra has publicly announced an inflated opening price which does not reflect the current market price and is not available to new suppliers,” Jenkins said.

“The comments are nothing but misleading, and at a time when the dairy industry has committed to rebuilding trust along the supply chain, they are unhelpful in our effort to create a transparent milk price for the dairy industry.”

Jenkins said the statements showed Fonterra and BSC are inconsistent after neither company recognised the benchmark return set by Murray Goulburn last year at $5.53/kgMS.

“Fonterra wants to give the appearance that they are offering a more attractive price than any of the other processors at $5.70/kgMS, but it’s simply not true and Fonterra and BSC need to make that clear,” he said.

“Our industry landed in a very dark place 18 months ago for not reflecting the true market price in the farm gate returns and we do not want to land there again.”

UDV praised all processors for releasing their opening prices before the start of the season in July, in line with a motion passed at the dairy group’s May conference.

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