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Summer price rise for Bega Cheese suppliers but future not secure

Elka Wood 5 November 2019
Robert and Will Russell. Photo: Ian Campbell.

Robert and Will Russell. Photo: Ian Campbell.

Along with the water in our dams and rivers, Australia’s milk pool is dwindling, leaving processors like Bega Cheese in the position of having to pay more in an increasingly competitive market.

“The price for milk fluctuates throughout the year,” explains fifth-generation Bega dairy farmer Rob Russell “so we usually get paid more over winter when it’s considered harder to produce milk.”

“As I understand it, the recent increase will mean we are paid an extra 5 cents per kilo over December and January.”

In his speech at the recent Bega Cheese annual general meeting, board chair Max Roberts opened by acknowledging that the company has delivered “a solid result in what has been a challenging year for the dairy industry.”

Mr Roberts says that the supply and competition issues anticipated by the company have become worse sooner than expected.

“We have previously been advised that conditions impacting 2019 would continue into 2020 and this has proven to be the case, but at a faster and deeper rate,” he says.

“The ongoing drought has resulted in a significant reduction in Australia’s milk pool and higher costs across our business.”

The bottom line for the company is that earnings are expected to fall to between $95 million and $105 million for 2019-20, compared to $115 million in the last fiscal year.

Rob Russell sees the company “stuck between a rock and a hard place.”

“They have to make their bottom line work, just like we do. We want Bega Cheese to be a strong company.”

Rob is not concerned for his own family but is deeply concerned about the next generation of farmers, who don’t have the assets and dividends to help them through dry times.

“We’re not making any money but at the moment, we can withstand what the environment is throwing at us,” he says.

While this week’s rain has left him feeling positive, Rob’s voice goes quiet when he speaks about the future of farming.

“The industry can’t afford to lose young farmers but that’s what happening. It’s terrible. A small price rise doesn’t do much for dryland farmers.”

While dairy farmers don’t have much room for diversifying, Bega Cheese has made diversifying a priority since it first floated on the stock market in 2011.

“In my 36 years with the company, I’ve seen Bega Cheese transition into The Great Australian Food Company,” Mr Roberts says in his AGM speech.

The company has introduced 41 new products or product variations and three new brands this year – Simply Nuts, Farmer’s Table and Modern Chef, and continues to broaden its reach in nutritional products and infant formula, including goats milk and organic varieties.

Export products now make up 31% of the companies revenue.

But all these food products rely on farmers to produce a raw product, which in turn relies on stable environmental conditions.

Rob says he is “really frustrated” about the lack of government action about climate change.

“I’m a believer in global warming, our whole system of living is mucked up and it’s frustrating because five years ago, ten years ago, we could have done something so we’d be in a better position now.”

What's Your Opinion?

One Response to Summer price rise for Bega Cheese suppliers but future not secure

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Margosha Pyke 11:39 pm 05 Nov 19

I think the farmers across Australia will join up with the Environmental movement and dictate terms back to the current Climate-Change denying/talking down useless government. New parties will be formed as Labor and Lie-beral both seem too disconnected from Nature and the environment for city folk, and also the people who make their living on the land who supply food for our hungry nation and overseas nations in important exports for Australia, like Bega Cheese and our milk products.
The writing is on the wall and the Dinosaur Deniers and useless political squabblers will lose seats to the new parties. More disenchanted feisty young people will be soon joining the ranks of voters and you have to earn their respect, so I think this will create great change. The despair, apathy and hopelessness we see today in many of our our young is already changing to a fire in the belly and protesting against inaction on Climate Chnage on a global scale will increase dramatically.
The tipping point is reached, as Nature and the Environment are never properly valued, and only “the economy” and “money” is worshipped – Well now, that has got to change and young innovative and old traditional (changing) farmers, young and informed environmentalists, agri-scientists and water resources/sharing hydrologists are going to call the shots in the battle against Climate Change. Big profit-driven anti-environmental corporations from overseas can’t keep on driving their user agenda, using up the rivers, polluting them and eroding and depleting soils.
The worm has turned and Aussie farming like global farming must and will change. You can’t fight Mother Nature, and farmers in this tough brown land know that too well, as do their young people and children. Start by looking at your own environmental footprint on Australia, what you buy, use up, fix, recycle or throw away, and make household decisions to improve it and minimise your family’s eco-imprint on the land and Nature. Keep an open mind and get better-informed by professional people who methodically research these issues -independent of overseas user-biased mega-corporations.
Support local Farmer’s Markets and your local innovative environmentally-aware farmers who improve their land without polluting it with unnecessary dangerous chemicals and who plant tree corridors around their farms down to the rivers, for birds and native wildlife to travel through in safety.
Buy fresh, local and environmentally-friendly sustainable produce and share/trade your vegie patch harvests and excess seedlings with neighbours…
Lobby your apathetic and uncaring politicians about what they are/aren’t doing to alleviate Climate Change in this Bega Valley and Australia and don’t take showy promises or outright electioneering BS “spin” as answers. Talk is cheap and useless. Action is what we want now, and what our struggling farmers need straight away. Support our local farmers in this challenging shared change process, as we all will have to change how we do our agriculture and daily life choices, to cope with quickly-worsening Climate Change increasing our natural disasters (drought-flood, soil loss in dust-storms, temperature spikesand massive bush-fires…). Involve our Aussie Indigenous people in caring for country here and support Indigenous fire-management strategies and education. The world as we know it is in critical flux- it is up to us all to co-operate, innovate and meet this challenge with tough informed timely decisions and intelligence,or… [Full-Stop.]

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