Milk crisis a boon for SA independent farmers

The consumer backlash against below-cost milk prices over the past month has caused a big windfall for a South Australian milk company that pays its farmers well.

Jun 09, 2016, updated Jun 09, 2016
Fleurieu Milk Company dairy farmers Barry Clarke and Geoff Hutchinson. Image: supplied.

Fleurieu Milk Company dairy farmers Barry Clarke and Geoff Hutchinson. Image: supplied.

The Fleurieu Milk Company has enjoyed a spike in its milk sales from 93,500 litres a week to 125,000 litres a week since the popular outcry began.

“More than 40 new retail stores, cafés and restaurants, from as far afield as Whyalla, Leigh Creek, Tailem Bend and Naracoorte have begun to buy milk from us over the last seven days” manager Nick Hutchinson said.

“… the consumers of South Australia have put their money where their mouths are by buying local, branded milk in increased numbers, and we’re both delighted and humbled by the support we’re received.”

The company has also recently signed a contract with Australian Fine Foods to sell SA yogurts in 24 countries around the world.

Hutchinson told InDaily it was “a bittersweet one” and an “unfortunate situation for a lot of farmers around the country”.

However, “media attention has given consumers brand awareness for independent dairy farmers like [Fleurieu]”.

Milk giants Fonterra and Murray Goulburn slashed the prices they were willing to pay Australian farmers for raw milk last month.

The Fleurieu Milk Company competes against those companies and sets its own prices for farmers’ products.

It benefited from a consumer switch, advocated on traditional and social media, to buy branded milks that supported farmers with higher prices.

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The Fleurieu Milk Company has taken on two new farms since sales began to lift, and Hutchins said the company would now have the capacity to take on more farmers, to be paid above cost of producing the product.

He said six of the eight Myponga dairy farms now sold their all or some of their product through the company, which was established in the mid-2000s in the midst of falling prices.

“They were getting paid less for the milk than it cost to produce,” said Hutchinson.

The company was set up to be a “price maker rather than a price taker” so that farmers could be paid sustainably.

The company is also currently undergoing a $600,000 expansion to increase its storage space, create new offices and boardrooms and to introduce door sales.

While the surge in consumer support was not the catalyst for that expansion, Hutchinson said it came “at the right time” to meet the booming demand.

The company’s milk is sold in supermarkets, health food stores and more than 300 cafés and restaurants across Australia

The company is celebrating its tenth birthday this year.

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