DEMAND for branded milk in the wake of the farm gate milk price slash has seen a Barham independent milk processor’s sales jump by 25 per cent within a week.
Jonesy’s Dairy Fresh, which operates five farms and milks about 1000 cows, was established in December 2009 after owner, Wayne Somerville became frustrated about poor milk pricing.
Mr Somerville, who grew up in Strathfieldsaye, processes his own milk and sells it independently to retailers and private customers across northern Victoria.
His was the first Australian company to export fresh milk to China.
“This $1 a litre milk has devalued milk to the point where it is not viable for anyone,” Mr Somerville said.
“If we went to each of our suppliers and said we have had a tough year and would like $150,000 returned, they would tell us to go jump.”
Jonesy’s operates two farms near Kerang, two at Tullakool, New South Wales and one at Mount Gambier, South Australia.
Two litres of Jonesy’s full cream milk costs $4, double the price of home-brand milk sold at Coles and Woolworths.
There has been groundswell of support from consumers to steer clear of home-brand milk and purchase branded milk instead, so a fair share of profit is returned to suppliers.
“We may not be the cheapest in the fridge, but we’re not trying to be. Our milk is a quality product, produced sustainably and cost-effectively. We don’t absorb the profit differential, because unlike other companies, we make sure it’s farmers who are getting a fairer deal,” Mr Somerville said.
In the past week, the business has signed up new stockists in regional and rural towns.
“Our ambition is to increase our milk sales from the farms we operate, and then hopefully take on suppliers. Even if we can reduce the pressure on one farmers, that is a start,” co-owner, Rhonda Somerville said.
Jonesy’s milk is usually processed at Corryong, east of Wodonga, but is currently being processed at Kyabram.
“The idea was to establish a plant at Barham but the residents stopped us. I don’t know whether we will tackle it again… it was at a crucial stage of growth stage of the business,” Mrs Somerville said
It took us two years and they ended up taking us to the New South Wales Land and Environment Court and got rolled on a technicality because the council hadn’t advertised the planning adequately.
“It knocked us around a fair bit in as much as the business was growing and the processor couldn’t cope with our growth.”
Mr Somerville said the recent support package initiatives from the State and Federal Government fails to provide immediate relief for already stretched budgets.
“If you are a counsellor, that’s good because you are going to have a job for while, but the reality is farmers don’t really want a counsellor, they already know they are in the s___,” he said.
“What they want is to be able to pay their bills, and what they want to get is a realistic price for their milk.”
Mr Somerville said the support from city counterparts was overwhelming and is hopeful that dollar-a-litre milk would soon cease.
“The impact on budgets is instantaneous; their cheques are taking a hit straight away,” he said.
Mr Somerville said the structure of Murray Goulburn’s governance is also hurting farmers.
“They have gone to a shareholder set-up and have to satisfy them in the process. As a co-operative their objective is to pay as much money as they could to farmers, but now they need to ensure the investor gets a return and also appease farmers in the process,” he said.
“That’s why we established Jonesy’s so we could control our own destiny and look after ourselves.”
