Queensland dairy farmers trust Norco agreement

Dairy mandatory code of effective from June 1

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PRICES RELEASED: Karenne and Chris Mullens, Carinya, Allora, milk 250 cows supplying to Norco. Picture: Five Diamonds Photograhy.

PRICES RELEASED: Karenne and Chris Mullens, Carinya, Allora, milk 250 cows supplying to Norco. Picture: Five Diamonds Photograhy.

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Dairy mandatory code of conduct one thing - but understanding it is another.

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Norco dairy farmer Chris Mullens will know more about the dairy industry mandatory code of conduct when he meets with his milk representatives later this week.

Chris and wife Karenne, along with his brother Andrew and wife Naomi, milk 250 cows on their farm Carinya, near Allora.

The roll out of the mandatory dairy industry code of conduct came into effect from June 1 and milk processors must publish standardised milk supply agreements to cover all circumstances in which they intend to purchase milk in 2020-21.

Chris Mullens said they hadn't really been bothered about the latest code of conduct, as they have been supplying Norco since 2007 and wouldn't have it any other way.

"We supply Norco with about 2.4 million litres annually and know they will pay us for every litre we produce," Mr Mullens said.

"The industry is tough, but the drought has been tougher and we are just concentrating on keeping our cows fed. We have just finished chopping 2700 tonne of corn silage that will last about 12 months."

Minimums visible buy messy

Almost every Australian dairy processor waited until the last few hours - or minutes - before the deadline to publish standard form agreements elapsed at 2pm on Monday.

But while the code gave agreements visibility, understanding them was another matter, Queensland Dairyfarmers' Organisation executive officer Eric Danzi said.

"It was ... certainly a positive that processors are forced to disclose minimum prices all on the same day to give some clarity to farmers," he said.

"However, unless you've got someone to analyse the contracts, it makes it really hard to compare or figure out what the prices were.

"For North Queensland, the price appears to be what they received this year, which is not the best given the poor price they've had.

"I don't think the farmers will receive that well at all."

Mr Danzi said the prices would see the industry continue to contract in North Queensland.

"North Queensland's hemorrhaging and they are probably getting 10 cents below where most others in the state are sitting."

Mr Danzi said he would like to see greater clarification on how long-term contracts signed before the code was put in place would be treated next year.

United Dairyfarmers of Victoria president Paul Mumford agreed the complexity of different processor pricing created challenges.

"We couldn't really compare apples with apples because some of the processors don't charge a collection fee or a litre fee," he said.

"You've got to do your own due diligence, understand your business, and how your farm generates a profit."

Mr Mumford said "people were frantically scrambling around trying to find information" and said the code could be refined over the next 12 months to create a "one-stop shop".

Finding the standard milk supply agreements on some processor sites was a challenge, with Saputo Dairy Australia among those who suffered technical difficulties displaying the documents.

Mr Mumford wasn't surprised by the hiccups.

"All of these processors wouldn't announce their opening milk price for at least another three weeks, if not five weeks," he said.

"Some years we saw prices coming out after July 1, historically.

"So, there's an element of the processors getting their own ship in order."

Bega Cheese chairman Barry Irvin said the code reflected many of the company's existing practices.

"It meant that we, of course, did have to apply resources and, and create a slightly different relationship with suppliers that's more formalised," he said.

"But I'd say that in general, that was something we were happy to embrace."

er all circumstances in which they intend to purchase milk in 2020-21.

Chris Mullens said they hadn't really been bothered about the latest code of conduct, as they have been supplying Norco since 2007 and wouldn't have it any other way.

"We supply Norco with about 2.4 million litres annually and know they will pay us for every litre we produce," Mr Mullens said.

"The industry is tough, but the drought has been tougher and we are just concentrating on keeping our cows fed. We have just finished chopping 2700 tonne of corn silage that will last about 12 months."

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