Swan Marsh sharefarmer Brett Craig, a Fonterra supplier through Bonlac, said it’ll be many years, before faith in milk processors was restored.
Murray Goulburn slashed its milk price from $5.60kg/ms to $4.75-$5, offering suppliers a loan package, while Fonterra cut its payments from $5.60 to $5.
Asked where it would leave him, Mr Craig said: “with a lot of money to make up for, and no trust in Fonterra.
He said the Fonterra price cut came as a complete shock.
“We had a price review, prior to that, where we were told they were committed to holding - we knew there was a world problem, but we were told otherwise.”
He said sharefarmers, or young people starting out in the industry, didn’t have access to secure capital.
He said he‘d also been told very few producers would be eligible for the Federal government’s concessional loan, as property values would be taken into account.
“The land is worth too much, on paper, and if you are a landholder, you can get access to finance anyway and are only going to save one percent at best.”
Mr Craig, who has a 220 strong herd, said the price cut would leave a $65,000 hole in his budget.
“No-one can apply for concessional loans without income estimates either and we can’t do that without an opening price – its a political stunt,” he said.
While he said off farm income, through contracting work, had helped, that would dry up over winter and as other milk producers were unable to afford his services.
“We have debt, just the same as everyone else – we have made a lot of phone calls, to people we deal with.”
Mr Craig said availability of the loans was not the biggest issue, facing many farmers.
“That’s not the issue for me, the issue is why has this been able to happen ?”
