Dairy deal worthy of repetition

Architect of Woolworths deal says it is a good farmer model


Business Management
THE ARCHITECT: Dairy farmer Tim Bale is architect of the producers' group Manning Valley Fresh, which supplies Woolworths at an average price of 65 cents a litre. He says their flexible contractural arrangement could suit a number of similar groups.

THE ARCHITECT: Dairy farmer Tim Bale is architect of the producers' group Manning Valley Fresh, which supplies Woolworths at an average price of 65 cents a litre. He says their flexible contractural arrangement could suit a number of similar groups.

Aa

Stewarts River, NSW, dairy farmer and architect of the producer marketing group Manning Valley Fresh, Tim Bale, says his beneficial dairy deal with Woolworths can work for anyone willing to pool resources and stick together.

Aa

Stewarts River, NSW, dairy farmer and architect of the producer marketing group Manning Valley Fresh, Tim Bale, says his beneficial dairy deal with Woolworths can work for anyone willing to pool resources and stick together.

Producers on this part of the Mid North Coast have been aligned closely since deregulation through the Taree Collective Bargaining Group, which helps their cause in a district that supplies a quarter of Sydney's liquid demand.

But that didn't stop National Foods, at the time, refusing all conversation to do with price rise and under their two-tiered system excess milk rarely sold for anything more than 15 cents a litre.

Four years ago a sub-group of milk producers formed Manning Valley Fresh and approached Woolworths with an offer of consistent quality at scale.

Related reading:

In return, they received a non-exclusive three-year rolling contract, and the seven producers who are part of Manning Valley Fresh now receive on average 2c/l more than Norco, which leads the industry on price.

"My thinking was to fix one at a time and if we can't fix them all we can a fix a few and the rest will follow," said Mr Bale, a former Department of Primary Industries dairy officer who also sells real estate at Wingham, NSW.

A better price is handy when farmers in drought are paying up to $650 a tonne for hay and without much grass the only way to get a milking response is with grain.

But Mr Bale says the most valuable component of this contract is its flexibility, including the ability to sell excess milk to other parties - something that doesn't often happen with their contract pulling 17 million litres from the seven farms.

"All of us have measured more than 230,000 somatic cell count at various times but because we supply as a group the others producers carry that one. And if some fall short others can make up the volume. We have never missed a B-Double since we started," Mr Bale said.

Read more stories like this on Australian Dairyfarmer

The story Dairy deal worthy of repetition first appeared on The Land.

Aa

From the front page

Sponsored by