Dairy farmers face D-Day

THREE of the State’s top dairy farmers who are out of Brownes Dairy contract after tomorrow, still hope to see a tanker come up their driveway on Saturday to collect their milk.
They know it will not be a Brownes’ tanker, but they hope it might be picking up for Lion Dairy & Drinks or Harvey Fresh.

“I have a feeling we’ll see a tanker Saturday, but I don’t know whose it will be and I don’t know how much we will be paid,” said Dale Hanks, third generation Harvey dairy farmer, former chairman of Dairy Australia’s WA arm Western Dairy for six years and one of the three, this week.

“I’m hoping to see a tanker on Saturday,” said Graham Manning, a fifth-generation dairy farmer who has farmed for 40 years.

His father established the Harvey farm with a war service loan and Mr Manning bought it from him in 1990.

For the past 14 years he has been ranked by Dairy Australia in the top five per cent of Australian dairy farmers each year because of the quality of his grade one milk and for nine of those years he was among the top 1pc.

Wagerup dairy farmer Tony Ferraro shrugs his shoulders, “I hope I’ll see a tanker Saturday”.

Tomorrow, the last day Brownes has said it will collect his milk, is Mr Ferraro and his wife Tina’s 44th wedding anniversary.

He does not know if he will feel like celebrating.

He started the business when the dairy industry was a regulated and a safe investment and built it up with his wife so sons Richard and Paul, who now help run it, had a future in the industry.

Now that plan is in turmoil.

Mr Ferraro has vowed to give his dairy farm enterprise 90 days from tomorrow to try and find a way to make it work.

If he can, he is prepared to reinvest heavily in it and has the support of his bank, but a three-year contract at a price “with a five at the front of it” is the minimum he considers necessary to be viable.

Likewise, if there is no tanker on Saturday Mr Hanks expects to make a decision on ending dairying by Christmas.

Mr Manning said he will continue milking for another two weeks although he estimated it will cost him about $2000 a day if his milk is not collected.

The three each milk about 270 cows twice a day and cannot dry them out quickly.

On Monday they said they were prepared to tip their milk – up to 9000 litres a day each – down the drains, starting Saturday if needs be.

While they acknowledged neither Lion nor Harvey Fresh could take on all three, they believed their milk could be split between processors.

They were adamant, if forced out of the industry by Brownes’ decision not to collect their milk – the first time in WA history a processor has declined to collect milk from farmers, they claim – and no other processor offers a viable contract, they will be out for good.


Graham Manning with his herd which he says he may have to send to an abattoir. His forebears started a dair in Mounts Bay Road, Perth, near where Jacob’s Ladder is now, in the 1860s and they ran their cows on what was fenced off in the 1870s to become Kings Park.

If forced to sell their herds for slaughter – Mr Hanks’ plan to spread the nexus of his herd’s breeding cows among trusted farmers was thwarted by processors – the WA dairy industry will be down between eight and nine million litres a year whether there is surplus milk or not.

“I’m not getting up at 4am to milk cows for nothing – I can sleep in until 8am to do that,” Mr Hanks said.

Since learning six months ago his milk will not be collected by Brownes he has made significant changes to his enterprise, selling off 48 cows in July and retaining more “beefies” – bull calves and steers to be fattened – in case ultimately he has to swing his operation over to beef to survive.

“It has been an extremely difficult period because we don’t know what will happen, our plan has had to make provision for both dairy and for another enterprise,” Mr Hanks said.

He acknowledged there may be cash-flow problems in a transition – water and land rates alone cost him $50,000 a year – but wife Leanne brings in an off-farm income to help.

Mr Manning could retire, but said he would be bitterly disappointed if the timing of his retirement was not of his own choosing and was brought about by Brownes’ decision in response to a market situation he felt could be resolved in time and normal falling milk production rates after the spring flush.

A Vietnam War conscript, Mr Ferraro said he would apply for a service pension and his sons would have to find other jobs.

The farm, which had most of its fencing and pasture destroyed in the fatal Yarloop fire earlier this year, was not big enough to sustain a beef operation to support two families, he said.

One of the reasons the three hope to see tankers on Saturday is because the loss of three good dairy farmers – they each run businesses with annual turnover of better than or approaching $1 million – would, they believe, have a significant and lasting impact on confidence of the State’s remaining 117 dairy farmers.

And the impact would not just be on dairy industry investment, but associated industries and even local communities in the Harvey region.

For example, they each bought cow pellets from Milne Feeds, Mr Hanks said.

If forced out of dairying, they will not be buying pellets.

Mr Hanks has laid off two full-time and two part-time staff – equivalent to 2.5 full-time jobs.

He said one worker who has been with him for five years was “doing what he can to help out” and daughter Taylah, 16, and son Flynn, 14, were helping milk at weekends.

A dairy trainee with potential – he was one of six nominated for inaugural Young Dairy Farmer of the Year awards, ironically sponsored by Brownes – left soon after Mr Hanks was notified his milk would not be collected and is now driving trucks in the Wheatbelt.

Mr Hanks said he knew of two other people who had hoped to make a start in the dairy industry but had been deterred by the uncertainty now.

Mr Manning said he would continue to employ three fulltime and two casual workers until tomorrow but their job prospects after that would depend on what happened.

“I’ve explained the situation to them so they know what’s happening.”

He said the uncertainty had already had an impact on the quality of his milk.

“It’s starting to show,” he said.

“I should have had a $10,000 service (on his milking plant) done by now, but I put it off because I don’t know what’s going to happen.

“I’ve noticed the cell count starting to creep up.”

A service would have replaced cracked rubbers on the cups and milk lines, reducing risk of higher bacteria counts.

The three acknowledged the efforts of WAFarmers’ chief executive officer Stephen Brown and dairy council past and present presidents Phil Depiazzi and Michael Partridge in trying to find a solution with processors and State and Federal Governments.

Mr Hanks said personal approaches to Brownes had failed with a first email answered but subsequent emails unanswered.

He said they were angry at a lack of support from the State Government and its late involvement last week in talks to try and find a solution.

Jim Chown, Agriculture Region MLC and secretary to the Agriculture and Food Minister, had represented the State Government at discussions last week in the absence of a minister.

Mr Hanks said they were not sorry to see former minister Dean Nalder resign because he had shown no interest in the dairy industry or their situation.

Mr Ferraro said he had heard they had been described as “greedy farmers” at one of the meetings last week and denied that was the case.

He, Mr Hanks and Mr Manning said they had made commercial decisions to go with Brownes based on what Brownes had told them.

They had been approached by Brownes and offered two-year contracts with the option of a further two years, along with the promise of a two-cents-a-litre price rise for the option period.

Brownes had since used the promised option price rise as “an excuse” to end the contracts after the first two years and to not offer any other contracts, Mr Manning said.

“At the time (they were approached to join Brownes) they had just signed a long-term contract to supply Woolworths (with $1 a litre milk) and they had just lost two of their big suppliers so they were desperate to secure supply,” he said.

“They offered us the same price, 53.9c/l for grade two milk, that the other suppliers had been on.”

Mr Hanks said there were other farmers now receiving 55c/l for their milk who were “sitting back watching”.

He and Mr Ferraro claimed Brownes was now offering its remaining 55 suppliers an extra 2c/l, at 45c/l, if they signed three-year contracts early.

Most of Brownes’ contracts with its suppliers end on June 30 next year.
http://www.farmweekly.com.au/news/agriculture/cattle/dairy/dairy-farmers-face-dday/2753933.aspx?storypage=0

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