Butter prices – how they are better than ever
So why are farmers losing $500 million?
Dairy Farmers Victoria said despite record-high butter prices, its research showed about $500 million "will not find its way into pockets of dairy farmers" this season, after milk processors cut opening milk prices by 10 to 16 per cent.
"We understand that milk processors have been under pressure, but we believe there has been a gross over-correction to farm gate milk price," president Mark Billing told the Victorian Country Hour.
"We need to work together with processors to share the risk, and a milk price at the lower end of $8 per kilogram of milk solids is not sharing the risk, it's putting all the risk on farmers."
Dairy producers are leaving the industry amid record high prices.
To read the article and listen to a video courtesy Landline and Gippsland Reporter Emma Field.
Matt Brann & Warwick Long, Landline, 9 July 2024.
Multinational company Lactalis announces Echuca dairy factory will close resulting in 74 jobs lost
In short: French company Lactalis will close its Echuca dairy factory, potentially axing more than 70 jobs.
In short: French company Lactalis will close its Echuca dairy factory, potentially axing more than 70 jobs.
The company will invest about $85 million to upgrade its Bendigo site and some jobs could be transferred to this site.
What's next? The company is holding meetings with staff, but no firm date has been given for the site closure.
Dairy company Lactalis Australia has announced it will close its Echuca factory, on the border of Victoria and New South Wales in northern Victoria, axing up to 70 jobs this year.
But the company says it will expand its operations in the larger regional centre of Bendigo, potentially creating new jobs at this site.
Lactalis announced today it would invest $85 million over three years to expand its manufacturing and supply chain at other Victorian sites.
Chief executive officer Mal Carseldine said in a statement the French-owned multinational company decided to shutter Echuca after a "detailed review" of its yoghurt and desserts division.
"The plan sees us have one regional hub in Victoria that is fully utilised," he said.
He said the selection of the remaining milk factory took into account milk processing capability, operating costs, and site layouts.
"Based on this criteria, our Bendigo site was the most suitable option for us to invest in to meet our future needs in Victoria," Mr Carseldine said.
Mr Carseldine said the company was consulting with its Echuca team about the decision and how to best support workers through the transition.
He said the closure could impact approximately 74 employees and contractors.
"This is not a decision we take lightly," Mr Carseldine said.
"For some employees, there will be opportunities for redeployment to other Lactalis sites and those opportunities will form part of the discussions with individual employees."
He said the investment, much of it focused on Bendigo, would see more jobs, a new production line, and more yoghurt and custard capacity established at the Bendigo site.
Local MP devastated
Victorian Nationals leader and member for Murray Plains Peter Walsh said he only found out about the closure on Tuesday night when the company emailed him about it following a meeting with Echuca staff.
He said he was devastated on behalf of the workers and the community.
"The questions I will have for the CEO when I talk to him next week will be 'Why did you not invest that money in Echuca? Why invest it in Bendigo?'" Mr Walsh said.
"They have had a strong presence in Echuca for a long time — a great place as I understand it [with] a very loyal workforce there.
"Why didn't they invest in Echuca?"
Seven dairy processing facilities have closed since August 2022 including Bega's Betta Milk factory in Burnie earlier this year and consolidating its sites in Launceston and Kings Meadow, and last year Saputo closed its Maffra factory.
Union shocked
Australian Manufacturing Workers' Union organiser Chris Spindler said they had heard rumours that the site would be closed but said the announcement was still shocking.
Mr Spindler said the factory had been a prime site for the company with state-of-the-art machinery used on site.
"We don't fully understand the rationale behind [the closure decision]," he said.
"We prefer that they sat down and spoke to us at length before making that announcement to give us their concerns and to see what could be done in terms of saving the site."
Supplied by ABC Rural, Vic Country Hour, Callum Marshall & Warwick Long
10 April 2024
Saputo closes dairy factory in Maffra, scales down others in Victoria and South Australia, with 75 jobs lost
Saputo is to close its dairy factory in Maffra and scale back operations at two more sites, affecting 75 employees.
Bulk powder production at its Leongatha site and cheese packaging at Mil-Lel, near Mount Gambier, will be shut down.
In February, the Canadian milk processor announced plans to cut 18 jobs at its Maffra and Cobram factories.
And, in August, it announced further plans to scale back its Australian operations in the face of declining milk supply.
Speaking to the ABC this morning, the company said 75 employees would be affected, and redeployment would be discussed and, where not available, severance would be provided.
Leanne Cutts, president and chief operating officer, said some functions of the three sites would be relocated.
"Many of those impacted production and packaging functions at those three facilities will be integrated into facilities across the network," she said.
"It's business as usual for our customers … no change to the products and brands."
Ms Cutts said suppliers' milk would continue to be collected and processed across the Saputo network.
"We're committed to the Australian dairy industry and we want every litre of milk," she said.
When asked whether Saputo might close more plants, Ms Cutts said "we're always reviewing our network … because we want to make sure we continue to be efficient".
The changes will take effect in the first three months of 2023.
Tim Bull, Member for Gippsland East, said the Maffra closure was not a surprise, but it was still a big blow for the town of 4,000 people.
"The Maffra community saw the writing on the wall when there was a significant downsizing in the past 12 months, but it's always disappointing when you're losing jobs out of a rural town," he said.
"It comes at a time when there are plenty of sectors looking for workers, so there are plenty of job opportunities around, but we need to make sure these workers are transitioned appropriately."
Mr Bull said he hoped Saputo would support the repurposing of the Maffra factory.
"It is a big site in the heart of Maffra, so hopefully we can get Saputo together with Wellington Shire Council and come up with a plan to use that site for the betterment of the community," he said.
Saputo significantly expanded its presence in the Australian market when it purchased the former farmer-owned dairy cooperative Murray Goulburn in 2018.
At its peak in 2014–15, Murray Goulburn collected more than 3.6 billion litres of milk from Australian dairy farmers.
Since then, Saputo's milk intake has fallen to less than 2 billion litres.