Small dairy co-op doing big things

Small dairy co-op doing big things


IN 2002, group of organic dairy farmers got together and formed one of Australia's newest, and perhaps the smallest, dairy co-operatives.


IN 2002, group of Victorian organic dairy farmers got together and formed one of Australia's newest, and perhaps the smallest, dairy co-operatives.

Today, collecting milk prices about 25-30 per cent above conventional milk, the Organic Dairy Farmers Co-operative is a handy demonstration that farmers standing together can achieve things that individual farmers can't.

There are currently only 22 farmer members of the co-op - up from 15 in 2011 - but they have their own brand, True Organic; supply milk to Parmalat; and have established joint ventures to expand their processing capability.

Thanks to Chinese suspicion of Chinese-grown food in the wake of contamination scandals, Organic Dairy Farmers is also building a market in China - where the co-op's chief executive, Bruce Symons, was headed when he spoke to Fairfax Agricultural Media.

The co-op started because several organic dairies couldn't sell their milk above conventional prices, Mr Symons said. They decided to pool their milk and boost their bargaining capacity.

The co-op has grown, especially in the past few years. It now has six salaried employees, and the market is expanding faster than the co-op can get new dairy farmers through the three-year conversion from conventional to organic.

Various companies have "tried to pick people off" by contracting individual farmers. So far, Mr Symons said, the only members who have left the co-op did so to retire.

Milk returns have been consistently higher than the conventional market for co-op members - although when upswings in the market conflict with long-term contracts, the co-op can occasionally find itself on the same price footing as conventional milk.

Mr Symons thinks the co-op model is particularly suited to niche products.

"I don't know how we'd go if we were just growing beef cattle," he said.

Organic Dairy Farmers is built on a traditional co-op model, where one farmer gets one vote, irrespective of their contribution to the milk pool.

"We've spent a lot of time protecting the co-op from takeover - we want to safeguard it for future generations," Mr Symons said.

"If three-quarters of farmers want to sell, they still have to go through a third-party trustee who sets another lot of conditions on the sale. We just tried to make it that bit harder."

If farmers want to retire, the co-op pays out their shareholding. Co-op shares don't appreciate in value, but farmers accumulate them over time in proportion to their to milk deliveries.

But it's not just about the money, Mr Symons added.

Growing organically is as much a lifestyle choice as it is financial: a philosophical commitment to working differently with soils, pastures and animals.

The co-operative, as the word implies, is in this case an extension of that philosophy.

"We have 22 members," Mr Symons said, "but at the last meeting there would have been 55 people, including a lot of young farmers and toddlers wandering around."

The story Small dairy co-op doing big things first appeared on Farm Online.


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