What needs to change?
What needs to change?
Please log in to vote days left

now this is the language the organizers of the Frisian club are using

We specifically think of them as clubs not co-ops because I think it's important for groups to exclude people they don't want. You're in charge of who is in your club.

"The tone of a co-op is 'Give us a call and we'll start picking you up on Monday'. It's the lowest common denominator."

now this is in my view will lead to some very serious consequences for the whole Australian industry. its a seminal shift in the dynamics of the supply chain . We will exclude those that dont fit our purpose. below is the whole article from the Australian dairy farmer mag

he collaboration club

Recognising that farmers keen to collaborate are often stymied by overwhelming logistics, Friesian is offering a streamlined farmer to processor service.

Fronted by Simon Thornton, a handful of high-flying investors comprising the "Friesian Club" bought McColl's Transport about a year ago with the long-term goal to "build something great".

"Friesian's plan is to go deep in dairy," Mr Thornton said. "We think that it's a good long-term industry that needs to succeed in Australia and we want to be part of driving that success."

One of the investments has been in supporting farmer clubs.

"A series of groups of farmers have come to McColl's or Friesian saying, 'Look, you obviously see a future in this industry, how can you help us to succeed? We don't want to be individual farms dealing with individual processors.'

"We're working with groups of farmers who live in proximity, who believe in the same farming approaches and want to work together."

McColl's handles payments to farmers, quality testing, transport and even negotiations with processors.

"We have the systems that will set farmers free from having individual relationships with processors," Mr Thornton said.

"We specifically think of them as clubs not co-ops because I think it's important for groups to exclude people they don't want. You're in charge of who is in your club.

"The tone of a co-op is 'Give us a call and we'll start picking you up on Monday'. It's the lowest common denominator."

Friesian is only seeking to recover costs with its support of farmer clubs. It makes money by having McColl's collect the milk from farms.

"McColl's collects the milk on a modelled cost basis, we're very transparent," Mr Thornton said.

"We're not charging any more than the normal cost of running the trucks.

"As McColl's we are looking for stable work in an area that has a long-term dairy future.

"We want to help these farmers to find some way of working together other than they had in the past with the all-encompassing co-operatives."

To give farmers greater supply choices, Friesian is investing in staging points in western and northern Victoria.

"Friesian's goal is to transform the value of milk in some way," Mr Thornton said.

"Where we have milk that is geographically cut off from the processors who have the most value for it, we are looking for ways to invest in infrastructure to change the economics of logistics and therefore the milk.

"With staging stations, we can collect that milk from farms, chill it and put it into larger line-haul tankers, so we can take it further.

"Farmers in that club get a greater choice of where their milk can go, rather than effectively being trapped by the local monopoly."

Mr Thornton said he believed the dairy industry could become more efficient and profitable.

"I think Australia should have a competitive advantage on a world scale in dairy," he said. "We have a very inefficient industry and enormous inefficiencies just on the transport side.

"We'd rather have some low-cost thin-layer technology that allows us to pick up the milk and deliver it to the most efficient place rather than delivering it miles away.

"If we could just get transparency and allocate the milk to its highest value use every day of the year in an efficient way, then farmers and processors would make more money.

"There are days when the processors are effectively being force-fed milk that they don't have any good use for and they sell it onto the secondary market or swap it away and it becomes part of their balancing cost.

"Balancing costs can be huge. Balancing from the industry curve to flat, this year, on the Victorian market, with a pretty benign outlook, costs two cents per litre and rises exponentially with more seasonal production. When you get to three-to-one, it becomes six cents per litre.

"We've all got to work out how to reshape the industry so that it will prosper."

User avatar
ben
5 months ago · 1 votes · 0 comments
400 words left
Remember: Be nice to each other. (terms of use)

Tell your friends!

Get the link to this page to IM,
Skype or post it

Back To Top