Dairy farmer Dale Hanks is 13 days away from disaster. That’s when processor Brownes will stop picking up milk from his farm at Harvey.
In an unprecedented situation for the industry in WA, no one wants his milk. But it is not a tap Mr Hanks can turn off.
He has almost 300 pregnant cows and cows with calves in his herd as part of the long-term planning and management that goes with being an award-winning milk producer.
He can’t have the cows slaughtered because no abattoir will accept them in the late stages of pregnancy or early in lactation. He can’t tip about 10,000 litres of milk a day on the ground because it would breach strict environmental laws and could leach into the Harvey River.
Mr Hanks is one of four farmers whose supply contracts with Brownes run out on September 30. Their total milk production is about 10.5 million litres a year.
Mr Hanks, Tony Ferraro and Graham Manning are long-time producers. The Manning family have been dairy farmers for five generations. In contrast, Clayton Minson is a relative newcomer who saw a future in farming.
Mr Hanks with the next generation of cows.
They all face the same dilemma. What to do with their cows and milk.
WA’s two other major processors Harvey Fresh and Lion have refused to take the milk and time is running out for the State or Federal governments to lend a hand.
Mr Ferraro, who fought to save key infrastructure when his farm was burned out in the fires that destroyed Yarloop in January, said he would tip milk on the road as a last resort.
He is also considering sending cows from the farm at Wagerup to Harvey Beef for slaughter if the abattoir agrees to take them.
Mr Hanks had been working on a plan to send his cows to other farmers who agreed to help him through the crisis. That door was slammed shut by the processors, who do not want the farmers under contract sending in extra milk.
A wind change turned the fires away as they reached his farm eight months ago but Mr Hanks is not holding out much hope of a similar reprieve as Brownes sticks to a hardline cost-cutting policy.
It has sacked workers at its Balcatta processing base and shut a cheese-making plant at Brunswick.
Brownes asked Mr Hanks to be the face of a public relations exercise in the wake of the Yarloop fires when it donated 10¢ from every two-litre milk bottle it sold over a 17 days to the Lord Mayor’s relief fund. He agreed and was thrust on stage to fly the flag for Brownes at a benefit concert.
A few months later the processor notified him by phone that it was bringing down the curtain on his supply contract.
Mr Hanks said the June phone call came days after a face-to-face meeting with Brownes boss Tony Girgis where he was told his milk was wanted and an in-principle agreement was reached on a new contract at a lower price.
Private equity firm Archer Capital appointed Mr Girgis to turn Brownes around and prepare it for sale about 18 months ago.
Mr Girgis made it clear he would have to make tough decisions and some would affect about 60 farmers contracted to supply milk to the 130-year-old business.
This was in contrast to his predecessor Ben Purcell who recruited farmers to supply Brownes and offered them a premium price.
The four farmers coming out of contract on September 30 got caught up in that management misfire.
“This is not a poor farmer story. This is a poor management story,” Mr Hanks said. “We have been dealt with very poorly by Brownes.”
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The problem is not confined to Brownes, which declined to comment yesterday. Harvey Fresh has told five of its suppliers their contracts will not be renewed when they expire in January.
WAFarmers dairy section president Michael Partridge said the nine farmers produced about 25 million litres of milk a year worth almost $13 million at the farm gate.
Mr Partridge said WAFarmers had put a solution to WA Agriculture Minister Dean Nalder and his Federal counterpart Barnaby Joyce that would keep the farmers and their cows in production.
“We see this as a short-term problem and the industry can’t afford to go back 10 years by losing these farmers and their cows,” Mr Partridge said. “The State and Federal ministers are aware of the situation and we need an agreement next week.”
He was tight-lipped about the proposed solution but it is understood to involve the co-operation of at least one processor and a relatively small assistance package aimed at export markets.