Collective Power

Dairy Farmers Milk Cooperative

“Nine hundred million litres of milk [and] 600 farmers carry weight at the negotiating table,” Executive Officer Greg Griffith explains. “We use that collective might to get better terms.”

The organisation’s agreements are between Lion Dairy and Drinks (formerly National Foods) and the families that run 600 dairy farms scattered across far north Queensland, Southeast Queensland, New South Wales, Victoria, and South Australia. The group’s relationship with Lion makes DFMC the largest single supplier to Australia’s consumer dairy market. In fact, the cooperative’s farmers provide Lion with nearly one billion litres of milk each year.

DFMC offers crucial support to nearly 10 per cent of Australia’s milk production. According to its website, the organisation’s underlying goal “is to look after our members by providing value, security and guidance that maintains a viable and sustainable income.” Specific focus areas include pricing and policy, managing milk supply, member services, investment strategy, marketing and branding, and communications. The cooperative also works to maintain the sustainability of the dairy farming industry as a whole, which in turn helps to keep milk a healthy part of our everyday diet.

The recent milk price wars highlight the need for collective power among Aussie dairy farmers. The squeeze began when Coles slashed the price of its generic milk to just one dollar a litre. Woolworths quickly followed suit. Other milk brands were forced to drop prices just to stay afloat. Before long, a bottle of milk was worth less than a bottle of water.

The price reduction “has caused massive shockwaves through the dairy industry and through the supply chain,” Mr Griffith reports. “And really the price is not sustainable across the dairy industry.” The processer has to find a way to recover their costs. Naturally, “they look down the supply chain and the next rung down is the dairy farmer… It is a bit of a spiralling effect.” The cooperative is working to support dairy farmers through the tough situation and to “try and maintain the price where we can.”

DFMC is also undergoing a strategic move that will free up its farmers to sell milk to the highest bidder. To accomplish this goal, the organisation has recently restructured to create a second organisation known as Australian Dairy Farmers Cooperative. All DFMC members are members of the new spin-off and will have an opportunity to benefit from the new arrangement. “The Australian Cooperative role is to go out and seek commercial opportunities outside of the Milk Cooperative’s relationship with Lion,” Mr Griffith explains. “That isn’t to say that all of the 605 farms will all be suppliers of the new cooperative – there might only be a handful that are suppliers. But it allows us to potentially enter into new arrangements, seek new suppliers, [and] also provide dividends back – not only to the suppliers of this new cooperative, but also to the shareholders, of which the majority will be members of the Milk Cooperative.”

The Australian Dairy Farmers Cooperative has already begun to develop a promising new brand known as From Down the Road. The catchy moniker lends itself to any dairy product (milk From Down the Road, yogurt From Down the Road etc) and is expected to catch on quickly with consumers.

DFMC has been supporting Aussie dairy farmers for a little over ten years and the organisation is determined to bolster its members for many more decades to come. “It is about being collective and staying together,” Mr Griffith explains, and this all-for-one and one-for-all attitude is the secret strength behind the group. “We are not a multinational that will pick and choose farmers based on certain criteria. We try to be representative of the collective as a whole,” Mr Griffith insists. “We hold true cooperative values. We have a model that is fair and equitable.”

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

January 18, 2019, 3:29 AM AEDT