3 July 1998

CO-OPS WILL PAY IN LONG TERM

Pressure on milk price is such that an extra 1p/litre is certainly welcome. There must be many a Milk Marque member, looking at an average of just 18.2p/standard litre, who has considered leaving the farmer co-op to supply a dairy company offering a higher price.

Certainly, Milk Marques selling system has failed to secure higher prices for April to September. Dairy companies have been adroit at exploiting the bidding process to their own advantage – to drive down the price of milk and undermine Milk Marque.

Hopefully, after the Monopolies and Mergers Commission inquiry, the co-op will be able to offer a fairer price-fixing process.

And the move of Milk Marque and other farmer milk groups into processing should further strengthen returns to members.

Unfortunately, however, too many producers are short-term price takers, quick to fall in with buyers offering a penny a litre more. But if too many producers go down this route, dairies will win, taking control of the market and driving down milk prices.

Farmer survival depends on collective marketing skills that will enable them to meet supermarket strength on equal terms. Without that clout, profits of the multiples will increase as prices to farmers fall.

But whatever your marketing strategy, as this Update explains, milk quality will also be of paramount importance in securing premium prices in the market place. We find out how Hazard Analysis of Critical Control points will help ensure that milk hygiene bonuses can be met easily.

We also report how set-stocking is rewarding one forage enthusiast – and if you are a strong advocate of black-and-whites, our Breeding Page might make you think again.