Fonterra's late-season milk price cut is salt in the wound of south-west Victorian farmers already struggling in a dry season.
Mark Billing said at the family farm Craigland at Larpent, west of Colac, they’d had to re-sow 210 hectares of the 240ha milking area.
Just as they received some good rains, their 480-cow herd was calving down and they were getting back on their feet after what Mr Billing described as “a seven-month long summer”, he said “the rug was pulled out from beneath us”.
As a result of Fonterra’s milk price step-down, they will be paid $1.75 a kilogram of milk solids this month and $1.92/kg MS next month, down from the $5.60/kg MS expected before the announcement.
Dairyfarmers around Colac traditionally calve their cows down in autumn because it suits the grass production. As such, May and June have always been two of the Billing family’s biggest income months.
“We think of it as our bill-paying months, so the step-down has decimated our budgets,” Mr Billing said.
“We could take up the Fonterra loan (of up to 60c/kg MS) but that’s not a debt we had planned on, but we cannot ride out the $1.75 price.
"We’re meeting with the bank manager and the accountant together to work out how we can stay because I’m the fourth generation.”
Mr Billing said the step-down was impacting three generations – his father Alan said it was the biggest challenge to hit the farm in his 75 years; and he said he and wife Sam’s four young kids knew something was wrong.
“It seems Fonterra followed suit after Murray Goulburn cut its milk price, to ensure it made money for shareholders in New Zealand,” he said.
“Announcing it so late is unfair because spring-calving herds can dry their cows off but we don’t have that option.”
