Seasonal support payments are welcome, particularly at a time when dairy farmers are facing significant cost pressures, but farmers should be careful not to let those payments distract from the fundamental decision they are making about who they will supply milk to for the season ahead.
While seasonal support payments may provide additional income, they do not offer the same certainty or regulatory protections as a minimum milk price contained within a milk supply agreement.
The starting point for any comparison should be the milk supply agreement.
Farmers need to understand the minimum milk price being offered, examine the income estimates closely and understand exactly what is driving those estimates.
If processors believe current market conditions and ongoing cost pressures justify higher returns to farmers, there is a strong argument that those returns should be incorporated into the milk price rather than delivered through separate arrangements outside the code.
What farmers need most is certainty.
A fair milk price contained within the milk supply agreement provides that certainty far more effectively than payments that sit outside the protections of the code.
At a time of ongoing cost pressures, dairy farmers need fair returns backed by the protections of the code, not separate arrangements that sit outside it.
VFF UDV president Bernie Free
