DFMC welcomes Lion sale to Bega

Dairy Farmers Milk Cooperative welcomes the announcement that, after over two years of being on the market, Lion Dairy & Drinks has been bought by ASX-listed Bega Cheese Ltd.

Bega is a strongly established Australian dairy and food business, with over 120 years of heritage. It is clear that Bega is ideally positioned to drive the Dairy & Drinks business forward.

The sale will include all the white milk, Milk Based Beverages (MBB), yoghurt, juice and water ice brands, including Lion’s blockbuster brands – Dairy Farmers, Dare, Pura, Masters, Farmers Union, Yoplait, Berri, Daily Juice, The Juice Brothers and Zooper Dooper.

It also includes Lion Dairy & Drinks’ 11 dairy and juice manufacturing sites in Australia, the Dairy & Drinks International business, Lion’s share of the joint ventures Vitasoy Australia products (Vitasoy) and Capitol Chilled Foods Australia (CCFA), its majority shareholding in Made by Cow and the Dairy & Drinks’ licensing agreement for the Yoplait brand in Australia and South-East Asia.

Whilst we were initially disappointed to learn that Mengniu Dairy did not proceed with the sale process of LDD, we are pleased to see that Bega’s purchase is unconditional and requires no further regulatory approvals.

Bega is an iconic and well managed diversified food company with the heart and soul of a dairy company, and DFMC looks forward to commencing discussions with Bega about growing the supply of milk from our family dairy farmers’ base.

It is anticipated that the sale will be completed in early 2021 and will keep you updated should we hear any further announcements.

There is no change to your current milk supply contract as a result of this announcement

Top milk quality from July to September

Here are the Top 5 BMCCs for each region from July to September (average of 10-day periods).

Our DFMC suppliers are continuing to supply quality milk in all regions. It’s great to see some new names and locations appearing in the BMCC tables.

Southern region
Supplier Location State Av BMCC 10 day periods
1 RJ Perkins & SF Evans Laceby Vic 65,351
2 Elmhurst – The Barton Family Kancoona Vic 69,123
3 DJ & KB Leuenberger Waitpinga SA 82,469
4 Beck & Stew Robertson Yarroweyha Vic 103,468
5 JJ & BL Evans Greta West Vic 110,341
Supplier Location Av BMCC 10 day periods
1 MacArthur Stanham Holdings P/L Menangle 98,699
2 Miss ES Bowman Singleton 109,908
3 Glencoe Estates Jerrara 127,053
4 GF & RF Herne & TL Russell Brundee 133,527
5 Sheirlaw Dairy Pty Ltd Croom 136,525


Supplier Location Av BMCC 10 day periods
1 DA & CG Vonhoff Jondaryn 98,699
2 MJ & AA Wilson Calico Creek 108,550
3 KF & SC Collins Ravenshoe 109,588
4 McGregor Farming Jaggan 125,848
5 P & VA English Malanda 134,185

New format for 2020 AGM

Originally, we excitedly planned to hold the Convention, Quality Awards presentation and AGM in Far North Queensland this year. But with the pandemic we clearly needed to rejig our plans and put together the AGM to accommodate the various travel and gathering restrictions that are currently in place.

Fortunately, our co-operative’s rules accommodate for a general meeting held in multiple locations linked by on-line conferencing.  There are clearly some differences and obligations in how the meeting must be run, including that any speaker must be able to be heard by all others present at each location.  For those of you inclined to read the details, the DFMC Rules are available on our website at https://dfmc.org.au/operation/dfmc-constitution/ – Part 4, Division 2 Conduct of General Meetings on page 22.

We are planning to host the meeting as an online conference using Microsoft Teams from our Geelong offices on November 17 and have satellite sites for members to attend with DFMC staff, Directors or WRAC members managing venues.  So, whilst the event in FNQ would have been a terrific opportunity for members to visit a beautiful and unique dairying region, this format will afford more members the ability to participate via satellite sites.

In addition, members will also be able to participate remotely via the online conferencing system from your own home or business. However members participating via their own home or business will be attending the meeting as a guest and will only be able to vote by proxy. In the interests of public health and safety, we think it best if most people participate remotely and do not physically attend the meeting.

Will I be able to vote?

Yes. If you can physically attend the Geelong office or one of the satellite sites you will be able to vote as we will have nominated scrutineers to formally record the “show of hands” or indeed a more formal poll if called. If you participate remotely from your own home or business, you will only be able to vote by proxy.

Will I be able to speak at the meeting or ask questions of the board?

Yes. The platform we plan to use has very good functionality to indicate you wish to speak.  Protocols will be announced before the meeting and the Chairman will manage the questions in a manner similar to a physical meeting.  All attendees will be able to hear your question. The Standing Orders at General Meetings (Item 53 of the Rules) will be adhered to, however, in accordance with DFMC’s Rules, the Chairman may depart from the Standing Orders if this is for the benefit of the members or the Co-operative as a whole.

Will there be any special or unusual co-operative issues voted on at the meeting?

No. It is anticipated that the meeting will only address and vote on “ordinary business” such as the minutes of the last general meeting and the audited financial statements for the previous financial year. These are outlined in Section 49(1) of the Rules.

Covid-19 restrictions will need to be complied with.

In order to ensure everyone remains safe, we will need to comply with any Covid-19 requirements such as social distancing and limits in respect of public gatherings at the Geelong office and each satellite site of the AGM. Accordingly, if you are planning to attend in person at one of the locations, we will ask you to pre-register prior to the meeting.

In due course we will share specifics on where, how, and when with all members via mail including formal meeting notices and proxy forms.  Of course, if you have any questions please contact Tony, Dom, Dan or Mark.


Recognising high quality milk suppliers

Producing high quality milk, and recognising it, is important for DFMC.

Here are the Top 5 BMCCs for each region over the last 3 months of the 19/20 year (average of 10 day periods).

Terrific results given some challenging conditions in various parts of the country.

Southern region
Supplier Location State Av BMCC 10 day periods
1 RJ Perkins & SF Evans Laceby Vic                                   74,109
2 Elmhurst – The Barton Family Kancoona Vic                                   74,624
3 RG, BI & KM Bond Torrens Vale SA                                   92,028
4 JJ & BL Evans Greta West Vic                                   99,612
5 AJ & JM Wilson Strathmerton Vic                                   120,629
Supplier Location Av BMCC 10 day periods
1 MacArthur Stanham Holdings P/L Menangle                                   129,467
2 Glencoe Estates Jerrara                                   133,377
3 Hurlstone Agricultural College Glenfield                                   135,286
4 Beaulands Pty Ltd Numbaa                                   139,949
5 Michael  Cole Jamberoo                                   148,880


Supplier Location Av BMCC 10 day periods
1 DA & CG Vonhoff Jondaryn                                   136,744
2 Crouch Farming Mt Mee                                   136,949
3 RJ & CJ Hartin Millaa Millaa                                   138,735
4 J & S Geraghty Millaa Millaa                                   145,601
5 Gerber Farms Pty Ltd Clarendon                                   147,348

DFMC represented at Dairy Senate Inquiry

DFMC recently made representation to the latest Dairy Senate Inquiry. The matter was referred to the Rural and Regional Affairs and Transport References Committee in October 2019 for inquiry and the final report is now set down for November 2020.

The inquiry is into the performance of Australia’s dairy industry and the profitability of Australian dairy farmers since deregulation in 2000, with particular reference to:

  1. the ability of Dairy Australia to act independently and support the best interests of both farmers and processors;
  2. the accuracy of statistical data collected by Dairy Australia and the Australian Bureau of Statistics;
  3. the funding of Dairy Australia and the extent of its consultation and engagement on the expenditure of levies revenue;
  4. the merits of tasking the ACCC to investigate how it can regulate the price of milk per litre paid by processors to dairy farmers to ensure a viable dairy industry;
  5. alternative approaches to supporting a viable dairy sector;
  6. the introduction of a mandatory industry code of practice; and
  7. any related matters.

The DFMC submission was made in person by Chairman Andrew Burnett and separate contributions from DFMC farmers from far north Queensland James Geraghty and Johnny Gallo.  The following is a combined excerpt from Andrew’s submission.

It is DFMC’s view the major retailers have the ability to “loss lead” in some regions on a couple of product lines like milk, and make it up from the other 40,000 or more products lines sold.   Further to this the cost of servicing smaller regional retail outlets is clearly much higher than metropolitan areas. 

Generic milk now saturates the market with coffee shops, restaurants and school tuckshops using Coles and Woolworths as a wholesaler as it is cheaper to buy milk there than have it delivered.    Shelf space, internal restocking and re-ordering policies all influence and manipulate the volume of generic milk that is sold in comparison to branded milk.  Is this an abuse of market power, dumping, loss leading?

The dairy industry has been impacted materially from this national retail pricing approach. Acknowledging the different farming systems, farm sizes and regional, climatic issues, equals greater cost of production.  Queensland has a farm gate price approximately 15cpl higher than Victoria.  When coupled with a large regional footprint driving distribution costs higher, the fresh milk supply chain is not sustainable.  The national retail price is actually lower than the cost to supply milk in and processors, and in turn farmers, are losing millions of dollars to stay in this market.

When I read through ACCC guidelines and legislation there is little to no reference to state or regional boundaries or acknowledgment of the difference in markets.  It could be suggested that there are different markets for dairy commodities and fresh drinking milk, which has a more regional boundary for markets.   The ACCC did find in some regions milk was sold at a loss.  I believe that the “test” for dumping, loss leading and the abuse of market power, needs to be carried out on a state by state basis.

The full transcripts are available here.

Nominations open for DFMC board positions

Dairy Farmers Milk Co-operative (DFMC) is informing members that DFMC directors Adrian Dauk and Bernice Lumsden have resigned from the Board.  Both have moved on from DFMC to join other processors in response to an alternative offer which better suited their businesses at this time.

As South Australian-based milk supplier to DFMC and director, Adrian served initially on the Milk Pricing Committee and was appointed as deputy chair, Adrian is a passionate South Australian farmer with a growing business and worked selflessly on the board contributing to DFMC’s ongoing success. We are grateful for his involvement and support.

Adrian says “It’s been an incredible experience to be a part of the DFMC board for the past number of years and I have enjoyed the challenges that have been a part of the experience along the way.  I always have had the Co-operative’s best interest at heart.”

Bernice has been DFMC Victorian director and also worked on the Pricing Committee.  Bernice’s experiences outside dairy and on representative boards in the region were invaluable and she shared her business acumen and contributed in significant ways to the challenges faced by DFMC.

While it is unfortunate to see members and directors leave, our membership base is strong at around 340 across four states – and we plan to increase our supplier numbers in the Southern region in the coming months.

Would you like to have a bigger hand in helping to shape our co-operative?  We have called for nominations to fill the casual board vacancies and the Board is looking for people who have, or would like to develop, skills in negotiation, strategy, and communication, and will consider people who have:

  • Interest and suitability to represent members in your region
  • A desire to lead
  • Ambition to make a difference for the benefit of their co-operative and fellow members

If you have any questions about the position, please contact chairman Andrew Burnett or Executive Officer Mark Kebbell

Through our members’ collective milk volume and capital, DFMC is in a strong position to manage our members’ collective milk supply, maintain a milk policy to ensure high quality product and importantly negotiate competitive pricing at the farmgate.

ACCC Dairy Code of Conduct update

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.