Melbourne yoghurt and cheese manufacturer plans to buy milk direct from farmers.
A Melbourne dairy company will seek to buy milk direct from a group of Gippsland farmers in an effort to give them a fairer farm gate price.
Ibrahim Ozdemir is the managing director of Picnic Dairy Foods, which manufactures yoghurt and cheese products from a site in Coolaroo, a suburb north of Melbourne.
Mr Ozdemir buys about 80,000 litres of milk a week from a milk trader.
But on Monday he met with three West Gippsland dairy farmers at a property in Longwarry North to discuss a plan to buy milk directly from their farms.
Mr Ozdemir said since major processors Murray Goulburn and Fonterra slashed the price they paid to suppliers, he wanted to try and work out a way to pay farmers directly for their product and pay them higher prices.
He said he would seek to pay the farmers about $6 per kilogram milk solids, which equated to about 46 cents per litre.
Murray Goulburn expects to pay between $4.75 and $5 per kilogram, with a milk support payment program giving suppliers an equivalent milk price of $5.47 per kilogram.
“As a company our philosophy has been to support farmers and pay them prices they deserve,” Mr Ozdemir said. “We want to see if we can incorporate that into our business.”
Mr Ozdemir said farmers had been hit by “an unfair deal” since the major processors cut prices. “So we thought we’d reach out and see if we could work with them [directly].”
Mr Ozdemir said the Monday meeting was a chance to gauge farmers’ interest and work out logistical issues such as transport and quantities.
Farmers happy to deal directly with company owner
Jindivick dairy farmer Andrew Russell was one of the farmers who met with Mr Ozdemir to discuss potential direct supply.
Mr Russell said he was pleased to hear that Mr Ozdemir would seek to pay them a fairer price as the farmers struggled to deal with the dramatic cuts from the processors.
“It’s very important to us to be able to deal directly with a [company] owner,” he said.
“Especially since the way the milk factories have been treating us — they tell us one thing and they mean something totally different.”
All three farmers currently supply Fonterra, but Drouin South dairy farmer Trevor Mills said they were not locked into contracts to supply a particular quantity to Fonterra.
Mr Mills said he had no problem shopping around for a better price for his milk.
“I’ve got no ties to Fonterra at all,” he said.
“I’ve given them my loyalty for 20 years and as far as I’m concerned they’ve lost my loyalty now.”
Neerim South farmer Michael Perry said a farm gate price of $6 per kilogram milk solids was a price that would allow farmers to remain profitable.
“He’s being fair. He’s got to make money, like all of us,” Mr Perry said.
Mr Ozdemir and the farmers will meet in a few weeks once they have worked out any logistical issues.