Milk price index prize goes to…

An email sent to dozens of processors by Australian Dairy Products Federation chief, Dr Peter Stahle, has revived discussion about just who will do the analysis for the Milk Price Index (MPI).

It’s the latest twist in what can only be described as a “peculiar” chain of events to dog the rollout of what was billed as a $2 million solution offering transparency in farm gate milk pricing.

In the email, Dr Stahle wrote:

“…the group agreed that the Department would work to deliver, before the end of the financial year, a two-part MPI along the lines of:”

“Part 1 – A commodity price index based on global data, which would additionally indicate near-term trends

“Part 2 – Specific regional supplements that would, with brief commentary, refer to how farm gate prices had been impacted by market conditions. This would include a median price paid for milk (with a range), developed through a survey of farmers in the respective regions.

– extract from ADPF email dated February 6, 2018

During a phone call, Dr Stahle told Milk Maid Marian that industry was yet to see the final proposal and that the details remain open to negotiation and refinement.

Dr Stahle said it was proposed that, through ABARES, the Department of Agriculture and Water Resources would conduct the background analysis and deliver the index.

Meanwhile, Dairy Australia’s Charles McElhone said the involvement of a private consultant had not been ruled out. Although DA has consistently said it will not deliver the MPI, Mr McElhone said the research body would assist whoever was responsible for the analysis.

To ensure participation and a sense of ownership by dairy farmers, Dr Stahle said it was hoped that state dairy farmer organisations or other farmer representative bodies will engage in the delivery of training on the use of the index.

6 thoughts on “Milk price index prize goes to…

  1. so why will this not work its of the shelf . Why is this so complicated and why dont we take responsibility for this our selves . Time for DA to step up and stop ducking and weaving . Then we have the Gardner Foundation lurking in the back round . so many industry bodies that are well resourced surely we are capable of this task and not make a bloody circus out of this

  2. And the above is useless unless the current milk payment systems that the processors are using is thrown out the window and we go back to a 9/3 payment structure .What has to stop is farmers who believe their milk is worth more than their neighbour’s milk and demand a higher price for it.

    We need to realise that all farmers need to be within 30 cents a kilogram milk solids of each other if this industry is to survive.

    The processors are just playing to this and farmer’s egos.

    Farmers themselves will be the biggest roadblock to creating a fairer pricing system and not the processors and that the rub

  3. Milk maid ask dairy connect for a copy of a10 point plan. It has a milk price index in it . Charles Mc Elhone& Dr stable, will be interested.

  4. I believe Bill has hit the nail on the head.
    The processors don’t want to be transparent on pricing as it makes it easier to keep farmers in the dark and feed them you know what (mushroom food).
    Even though the ACCC inquiry is a separate issue, this whole thing of pricing to the farmer is all interrelated.

    These are some of my thoughts on the ACCC inquiry that I have posted on another site.

    Dairyend – 7th Feb

    This is just one scenario in the dairy industry. Another is the rising cost of production, electricity, water, dairy inputs, fertilizer costs and labour costs to name a few. When we hear that dairy farmers are struggling or unable to pay their bills there is something fundamentally wrong in the industry. Dairy farmers are price takers at the moment and this must change.
    We have just had an enquiry by the ACCC in Australia and they have come out with some interim recommendations as a way forward for the industry. They are mainly relating to the relationship between farmers and processors. The recommendations to my knowledge have had no support from the processors and no visible support from the major dairy farmer organisations which appear to be captive of the processors. Many of the organisation are going off onto a tangent and talking about $1 milk being the main issue. If we had been able to get rid of $1 milk we would have done so several years ago.
    So lets concentrate on what we have got to work with, the ACCC interim recommendations.
    Dairy farmers need to get behind these recommendations because we have a once in a lifetime opportunity to get fairer contracts where farmers can potentially drive the price they get for milk, not just be price takers.
    If we get the relationship between processors and farmers right that puts more pressure on the relationship between the processors and retailers to negotiate a better price for the whole industry.
    If things don’t change then the whole industry could collapse. The large producers will survive well, as they are able to negotiate a price (as they do now) which allows them to survive well and the rest of the industry (the smaller survivours) will continue to live at a subsistence level.
    It appears that Dairy Connect is the only dairy organisation that has come out and directly supported the ACCC recommendations.

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