It was part of a series of breakfasts held across Victoria, and provided an opportunity for industry stakeholders to hear about the direction of the company and the season ahead. It was followed by a suppliers lunch later in the day.
Guest speakers included managing director René Dedoncker, Farm Source manager Matt Watt and Fonterra Australia Suppliers Council chair Alan Davenport.
Fonterra opened the season with a milk price of $8.65/kg of milk solids, but soon lifted the price to match rival Saputo who opened at $9 — a softer market setting was blamed for a slightly lower opening price down from $9.50 last year.
Mr Watt spoke about this season’s market challenges, which included reduced demand from China, however, a shrinking Australian milk pool and a lower Australian dollar has offset some of the global negativity.
“The Australian milk pool has contracted to a 1995 level of production of around 8.1 billion litres which has led to competition for milk domestically,” Mr Watt said.
Last season’s wet spring smashed production data, with Fonterra supply in northern Victoria only now returning to positive production figures this month, however Victorian production figures as a whole are up three per cent and Tasmania 12 per cent.
“Globally we are not seeing supply growth and the availability for manufacturing milk looks set to fall under six billion litres,” Mr Watt said.
Mr Dedoncker spoke about the difficulty of running a business in the current climate.
He said increases in core costs — diesel, energy, labour and packaging — were costing the company an additional $25 million a month or $300 million a year.
He spoke about the importance of matching milk supply with assets and demand to future-proof the company in this difficult climate.
“We choose what we make to create repeatable demand across multiple channels.”
He also spoke about the importance of the Fonterra Australia Suppliers Council, whose overarching role is to represent the interests and views of Fonterra suppliers across Victoria and Tasmania.
Initiatives through the council include the Proud to be a Dairy Farmer program and Get to Know Fonterra program, which includes a two-day overview of Fonterra Australia.
The council also encourages active participation in supplier meetings, industry forums and conferences, along with a desire to foster the next generation of farmers.
Mr Davenport said being involved in the council was extremely rewarding, particularly when it comes to the next generation.
“It encourages farmers to take a wider look at the industry and build important connections for your own business,” he said.