The drought has claimed another victim as another dairy farm and processor in New South Wales calls it a day.
Dairy farm key points
- Yet another NSW dairy operation will shut down at the end of the week as running costs render the business unsustainable
- Ten staff will lose their jobs, and local businesses are expected to feel flow-on effects
- The operator says a lack of a floor price for milk, as well as the pressure of the drought, have made it impossible to continue
Big River Milk, based in the Clarence Valley at Southgate, will join more than 200 other farms that have shut down over the past decade when it ends more than 15 years of operation at the end of the week.
The operation, which has had numerous owners over the past decade, said the drought was making it impossible to continue.
“You know we were spending in excess of $30,000 a month on bought in fodder, besides our pellets for the dairy,” operations manager Barry Paff said.
“Businesses just can’t continue to do stuff like that.
“We’re at the point now where we’ve had to reduce the herd by two thirds and we’re trying to continue to supply our current customers at that high cost — it’s just crippled the business.
“But going forward it’s about the [dairy cooperatives] of this world understanding too, that they can’t continue to sell milk at $2.65 when the farm base is as tough as it is, and because we specialise in coffee shops, it does make it tough.”
‘A well-known brand’
At its height Big River was milking 250 cows and supplying Coles, as well as coffee shops along the coast, with its product.
The company broke the news of the imminent shutdown to its customers on social media at the weekend, saying its last deliveries will be this Thursday and Friday.
“We were trying up until as late as last Friday, trying to find somebody else to come in and try to take over that part of the business, which would have probably been a big help, but unfortunately just couldn’t do that,” Mr Paff said.
“We have had discussions with other parties over time.
“If we could find someone now that’s prepared to take over the factory, I think the actual owners would then endeavour to keep the farm running and supply so that we can keep it going because it’s a very well-known brand across the area.”
‘A sad reflection’
Shaughn Morgan, the chief executive of lobby group Diary Connect, said the impacts of the closure will be widespread.
“You would have Big River Milk go back into the local community and be able to put the money, their hard earned money back into the local community,” Mr Morgan said.
Big River Milk is expected to make its last deliveries at the end of the week..
Facebook: Big River Milk
“Certainly I think it’s vitally important that we’re able to maintain these dairy farms so that future generations of dairy farmers have an opportunity to be able to go back onto the land and ensure the survival of the dairy industry in this state.
“This is a crisis period.”
Mr Morgan said it is imperative that the farm gate price paid to the dairy farmer is above the cost of production.
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“Processors have an obligation to ensure that,” he said.
“In the instance of Big River Milk, they were able to do the entire value chain.
“It will be the flow-on effect to the retailers that will no longer be able to get this locally-produced, premium fresh milk.
“Now we’re going to be in a position that a further dairy farm processor is going to go into possible liquidation.
The coffee shops Big River supplied are, according to Mr Paff, “devastated, actually.”
“I’ve had many contact me … I can’t believe the amount of people who have come on Facebook and commented,” he said.
The company will not know until after Friday whether it will even continue to run the herd.
Mr Paff said there has been a push for a floor price for milk.
“Many years ago … we said farmers need to have a price of 75 cents, 70-75 cents would be sustainable,” he said.
“Well that’s a long time ago, so I would believe something like a 90 cent margin would be the price.”
Only weeks from Christmas 10 staff at Big River Milk have been told they no longer will have a job.
“Probably the hardest thing I’ve had to do in a long time, actually,” Mr Paff said.
“Also one of the other hardest things is selling good dairy cows to an abattoir.