They say, we are going to give you all this money, but then take some back before we give it to you. Just be honest and tell us in advance.
THE dairy farming Oates family didn’t milk in May and June.
As Fonterra suppliers they initially thought they were lucky and had missed the huge financial pain of slashed milk prices for that period.
They had dried cows off early to install a new second-hand vat, but this season they are paying for their decision.
Gary and Cheryl, with daughter Shannon 21 and son Nicholas 17, are now paying the interest on a loan they not only did not take from the factory, but are not eligible for because they didn’t supply milk in May and June.
“We have to go to the bank and borrow money and pay interest on the money we have borrowed from the bank and interest, although we have no money from Fonterra,” Gary said.
“We have looked into getting loans. We are right on the edge at the moment, the bank balance is pretty much zero.”
The family will be down $104,000 this season — compared with last — based on milk price alone. They will cut back on production, by feeding about a third less pellets in the dairy, reduce their fertiliser use and cut capital work.
“We are a lot better off than some other people. We will get through but it is going to be tough,” Cheryl said.
“We don’t have bills behind us other than putting the milk room in. We are lucky that way.”
Gary said these sorts of moves from milk processors’ tests loyalty, but stressed it was an entire dairy industry issue.
“They say, we are going to give you all this money, but then take some back before we give it to you. Just be honest and tell us in advance,” he said.
Fonterra Australia general manager milk supply, Matt Watt, said the support loans and “autumn offset” were payable to farmers who supplied milk in May and June.
“Suppliers who supplied no milk in May and June, such as those on a predominantly spring production curve who supplied all their milk last season at $5.60/kg/MS, or new suppliers to Fonterra, are not eligible to receive these support measures.
“This is because these suppliers were not impacted by the price revision last season,” he said.
About 3.5 per cent of the Fonterra supply base of about 1100 did not supply milk during May and June.