It is well documented that 2020 has been a big year for change. The much-anticipated mandatory ACCC Dairy Code of Conduct is being implemented during this year and on 1 June all processors announced minimum pricing arrangements, and openly published their standard.
For the first time the whole of industry could see who is paying what milk price, in which locations, and for what period of time.
DFMC’s competitive milk price modelling program was instrumental for us as a business to help decipher and decode the sometimes complex nature of milk pricing announcements, contracts and policy documents. This helped DFMC build a very informed factual case for negotiations with our processing partner. In some regions this meant revising our prices and offering an increased price for some contracts.
It is DFMC’s view the mandatory Code has been a positive for the industry as a whole. There will be ongoing fine-tuning of the laws by the government but having a guaranteed minimum price for the full term of agreements is a positive. In some regions the reduction of multi-year agreements may not necessarily be a positive for long term on-farm investment, but we are working through this with Lion in the short term.
For our members still on multi-year agreements, DFMC will be working through a transition period with individual farms in coming months to ensure their agreements are Code compliant.
We’ve been invited by the ACCC to provide feedback on the Code and its implementation to date. If you have any recommendations or comments (good or bad), please feel free to let us know.