The trouble with the MG and “Gary the Great” sideshow

Murray Goulburn’s colourful managing director, Gary Helou, is not universally loved and he’s become a bit of a target over the last year or so.

Some dairy farmers are nervous about his proposed transformation of the much-loved 100% farmer-owned co-operative into a “farmer-controlled” hybrid or are alienated by his brash, bullish style.

Some of his competitors hate him for driving up the price of raw milk (which is, of course, his mandate) and they also deeply resent this Devondale ad:

Given that Gary himself is a suit-wearing Sydney-sider who flies in weekly to MG’s Melbourne headquarters where a large corporate Mercedes Benz awaits him in the basement, he could be accused of a little hypocrisy.

So the acerbic commentary from the Financial Review directed at the so-called “Gary the Great” generates plenty of sniggers, including yesterday’s piece, which was republished outside the pay wall in The Land.

The article reveals a series of sales figures that suggest sales of MG’s Devondale branded products have tanked disastrously, followed by an observation that:

“When Helou locked Murray Goulburn into a decade of skinny margins supplying Coles with its $1 milk, his rationale was that it would lead to growth in his branded products and thus higher margins for his farmers.”

“But the growth has not transpired, which means the margins are on borrowed time – especially as Helou juggles significant debt covenants, tries to raise $500 million in new capital and wears major cost blowouts getting his new processing facilities online.”

Are the figures fair? I asked dairy industry analyst, Steve Spencer of Freshagenda, about the data quoted in the story.

“The figures are sourced from retail scan sales data reports, which are expensive and normally only purchased by some of the larger supermarket suppliers,” Steve explained.

“The figures supplied to the Financial Review are current and specific and certainly not publicly available, so the data was most likely leaked by a competitor. It’s unlikely that any of the figures were inaccurate but could have been used selectively to paint a certain picture or the columnist’s agenda.”

But if the article is fair, it’s worrying news for MG farmer shareholders. I invited MG’s Robert Poole to answer a series of questions to set the record straight:

  • Are the figures quoted in the Financial Review a fair representation of Devondale’s sales performance?
  • To quote from the Fin Review: “According to Murray Goulburn, a big upside of the Coles deal was that it would ‘drive significant growth in sales for [its] core Devondale milk and cheese brands in the years ahead’”. To what degree does the profitability of the Melbourne and Sydney plants rely on the sale of Devondale products?
  • How do actual Devondale sales figures compare to the budgets set when the plants were planned?
  • Does Murray Goulburn continue to enjoy “preferred supplier status” with Woolworths?
  • How have the Devondale sales at Woolworths compare with those at Coles?
  • Does MG plan to review its product mix or marketing strategy in light of Devondale’s sales performance?
  • How does Devondale’s sales performance compare with other areas of MG’s business?

Robert pointed me to a media release on MG’s website released later in the day. Unfortunately, it does not answer the questions. Instead, it plays the man rather than the ball, providing any genuinely concerned farmer shareholder little comfort.

Are the criticisms of Gary Helou and MG simply sour grapes or dirty competitive tactics? I hope so but it seems only time will tell. This is the tragedy of the “Gary the Great” sideshow: it all descends into an ugly bun-fight in which, ultimately, the farmer is the loser.

EDIT: I HAVE WOKEN TO AN EMAIL FROM ROBERT POOLE INDICATING THAT HE WILL BE PLEASED TO ANSWER THE QUESTIONS TODAY (20/02/2015).

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Filed under Dairy Products, Farm, Murray Goulburn

Valentine’s Day on the farm: what it means to love your animals

The sweet Jamie and Zoe

The sweet Jamie and Zoe

Meet my new love, Jamie. A “leopard Appaloosa”, he’s not the prettiest horse on the planet but he may well be the sweetest. At the ripe old age of just eight, he was the embodiment of freedom for some of our most vulnerable Australians as a Riding for the Disabled (RDA) mount.

Certainly, he has the calm, unflappable nature required but he got bored of walking gently around and around an arena. For Jamie is quite a character, smart enough to drink Coke from a can or juice from a box.

Farm life suits this inquisitive fellow down to the ground. There are always people coming and going, cows on the move and Jamie loves nothing better than a ride in the bush. We feed him carrots, brush his silky spotty coat until it gleams, take care of his health, smother him with affection and, in return, Jamie keeps me sane and more alive than I’ve felt in years. It’s a contract written in love.

Jamie wears his heart on his hide

Jamie wears his heart on his hide

I’ve always considered myself a horse rider even during the last seven years of being horseless. When Zoe was just a toddler and the grief from my father’s death was still raw, I had to put down my best friend, Mistral. No matter what the vet tried, she was in debilitating pain with arthritis.

Mistral

Mistral

Over the 22 years we were together, Mistral and I came to trust each other implicitly; we could face anything together. Her loss was devastating. But I owed it to her.

Anyone who cares for animals has to be courageous and selfless enough to put their well-being first. That’s what we aim for every day here on the farm when we are making decisions that affect their lives. And, let’s face it, nearly everything we do has an impact on the animals who share our home.

Farmers are accused of not talking about animal welfare enough. It’s difficult, just as raising the topic of child welfare would be, err, unpopular at a kindergarten barbeque. Nobody wants to have their parenting or animal care standards questioned – it’s insulting. But maybe it’s something we need to face with the same selflessness and courage we animal lovers expect of ourselves when it counts.

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Work with me to look after our cows

I want to give every one of our cows a better life. It may sound grandiose but I think of myself as their guardian.

BoldHeiferLoRes

I am not a corporation, not a money-hungry investor looking to tear a quick buck off the backs of our cows. No, I am in this for the long-term, not five years or a decade but for the generations beyond mine. Every time I plant a new trailer-load of trees, I imagine the deep shade they will cast when my children reach middle age.

How we planted trees 40 years ago

How we planted trees 40 years ago

Every calf we rear is fed with enough colostrum to bless her with a long and healthy life, not just until market day. And the herd is scrupulously isolated from disease like BJD, not just for now, but for generations of cows to come.

No rest for the mother of twins

A perfect multi-tasking mother cow!

I’m not an aberration, not a monster, just a farmer doing her best. So don’t tell me I am cruel if you don’t understand – or approve of – the way I care for our animals. Sit alongside me in the paddocks and, together, perhaps we can work out a better way.

 

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The freedom to be a cow

It’s not just Cheeky Girl who magically appears out of nowhere. I had to go down to the paddock after milking to check on the cows and found myself being stalked by a tall, dark stranger.

It’s a lot of fun just sitting, watching the cows. Real individuals, some are curious, some are timid, some haughty but, without exception, dignified.

There’s a fine balance in our interactions. Yes, we milk the cows but it is they who dictate the flow of our days, months and lives. Everything from wedding dates to annual holidays are chosen to avoid calving season, a time when all hands are focused on the safe arrival of the next generation.

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The Life of the Dairy Cow

1441 aka "Cheeky Girl" on the left

1444 aka “Cheeky Girl” on the left with the pink nose

Meet 1444, known to us as “Cheeky Girl”. If you were in the paddock alongside me, she would certainly want to meet you. As a calf, a yearling and now, a mature cow, Cheeky Girl’s always been one of the first in the herd to wander up to you in the paddock. You’re busy working on the fence, you turn around to see who’s sniffing you and there she is, every time!

Vegan group, Voiceless, today launched an “expose” of cruelty to Australian dairy cows called The Life of the Dairy Cow: A Report on the Australian Dairy Industry. Continue reading

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Filed under Animal Health and Welfare, Calves, Cows, Farm

Making the wet worthwhile

Not quite monsoon weather

Not quite monsoon weather

I’m writing this post hoping to be embarrassed by calling this a flop of a monsoon trough. Earlier in the week, we were promised 5 inches of rain by now but we’ve clocked up about a tenth of that in five days of drizzle with perhaps an inch or so supposedly delayed in traffic still to come.  Not that I would ever look a gift horse in the mouth, of course!

The gift of a good soaking in summer is precious indeed. We don’t irrigate here so rely totally on what falls from the heavens and our farm is set up to make every drop count. The silver lining of greater climate volatility is more summer downpours. We have sown deep-rooted perennial pastures, including the heat-loving tall fescue and cocksfoot, throughout the farm. These pastures respond almost instantly to rain in summer and increase our resilience to an increasingly tricky climate.

Bring it on!

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How much listening to farmers is okay?

"Fonterra on Twitter" by Digital Jungle

Excerpt from “Fonterra on Twitter” by Digital Jungle

I don’t need to tell you how much of a stir a report tracing Twitter conversations surrounding Fonterra made when it was tweeted by farmer Shelby Anderson (@cupslinga) yesterday. The extensive 54-page document monitored just one week of Twitter conversations and looked to be a sample of what the social monitoring service could provide rather than a commissioned routine report. Still, as Shelby tweeted, it was a veeeerrry interesting report all the same. Continue reading

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Filed under Community, Farm, Fonterra