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Suppliers face a tough year

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June 12, 2017

“I WAS trying to be positive and hopeful but I will be honest and say I felt gutted after this latest price announcement,” Ann said.

“I WAS trying to be positive and hopeful but I will be honest and say I felt gutted after this latest price announcement,” Ann said.

“We need to answer the question if we want to farm for a loss again or work hard to break even if we are lucky,” she said. “It is important to not react in fear and anger and process the information and look at your own business and the options that you have.”

Ann said many suppliers will now be asking themselves if they have “the emotional and mental strength to get through another year and what is the best way forward”.

“The general feeling in the dairy community is that we feel let down by our processors and there is no trust left anymore.”

Bega suppliers Stu and Clare Modra, Gunbower, are happy with their opening price.

“Bega’s $5.50 is above the cost of production for our farm and our system and a price like that will allow us to start to pay back some debt. It’s a good starting point and it is where the price needs to be,” Stu said.

He said while the cost of production fluctuated, and was dependent on commodity prices, he believed this year his cost will sit around $5.30 kg of milk solids.

“Water, hay and grain should all be reasonable this year and despite the tough start to the season last year, it turned out to be not as bad as we first thought it was going to be.”

The couple swapped from Murray Goulburn to Bega in January of this year – moving companies has been a positive step and given them confidence for their future.

“The difference in an opening price of 80 cents between Murray Goulburn and Bega is huge. Say you produce 100,000kg of milk solids annually then you are looking at $80,000 extra in your pocket which is a significant amount of money.”

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