Walsh calls for milk price cut reversal

MEMBER for Murray Plains Peter Walsh has urged dairy farmers and communities to keep the pressure on dairy processors Murray Goulburn and Fonterra after their retrospective milk price cuts. 

Mr Walsh’s call for the companies to reverse the price cuts came as New Zealand dairy processor Fonterra yesterday forecast a farm gate milk price of $4.25 per kilogram for milk solids, well below the amount required for dairy farmers to break even. 

Mr Walsh was buoyed by the hundreds of people who rallied in Melbourne on Wednesday, as he continued to push for initiatives that would help relieve the cash flow crunch dairy farmers are experiencing. 

“Management made the decision to cut the price, so management can reverse it. If they aren’t willing to back our farmers, then maybe it is time for new directors,” he said. 

“We stand side-by-side with our dairy farmers and we join them in condemning Murray Goulburn and Fonterra management for the recent price cut decisions,” Mr Walsh said. 

Fonterra’s forecast is an increase of 35 cents on the current financial forecast of $3.90, but economists believed dairy farmers needed upwards of $5 per kilogram for milk solids to break even. 

Fonterra chairman John Wilson said the forecast took into a range of factors, including the US dollar exchange rate, supply volumes and current global inventory levels. 

“We are expecting global dairy pricing to gradually improve over the season as farmers globally reduce production in response to ongoing low milk prices, however we continue to urge caution with on-farm budgets,” Mr Wilson said. 

For more on this story, pick up a copy of Friday’s Guardian (May 27, 2016).