Dairy in ‘strong position’? Australian firms largely ‘unaffected’ by bushfires but farmers distraught

By Pearly Neo contact

- Last updated on GMT

The recent bushfire tragedy that ripped through Australia has apparently not affected sales and operations of most major dairy companies – but has hit dairy farmers hard. ©Getty Images
The recent bushfire tragedy that ripped through Australia has apparently not affected sales and operations of most major dairy companies – but has hit dairy farmers hard. ©Getty Images

Related tags: Australia, Dairy

The recent bushfire tragedy that ripped through Australia has apparently not affected sales and operations of most major dairy companies – but has hit dairy farmers hard.

The bushfires left over 30 people and countless animals dead, thousands left homeless, and millions of acres of land ablaze since they started last year.

Amongst the many victims of this tragedy have been dairy farms – especially cattle that were burnt, injured, asphyxiated or hurt in any other way due to the fires.

It might well be expected that such a catastrophe would result in dairy supply and the industry as a whole being negatively affected, but several major dairy companies have stated that their operations are normal, though high levels of caution are being maintained.

“The areas where our factories and farmers are located remain largely unaffected by the devastating fires affecting Victoria and New South Wales,”​ Fonterra Managing Director René Dedoncker told FoodNavigator-Asia​.

However, with no immediate end to the fires in sight and with the continued dry conditions as a result of the drought, we are staying close to any emerging risks and our priority is to ensure our people and farmers are safe.”

Freedom Foods also confirmed that none of its dairy farms or operations were ‘directly affected’​, and that all sites remained ‘fully operational’​.

“[Freedom Foods’] milk supply remains in a strong position,”​ said the firm’s Managing Director and CEO Rory Macleod.

“We have had no interruption to daily deliveries and we continue to monitor the situation. We are working closely with our farmers to ensure they are supported through this period to ensure that supply remains unaffected.

“Freedom Foods is also working closely with key retailers by increasing, as required, supply of UHT dairy beverages to help minimise the impact of any fresh milk shortage.”

That said, some others were not so lucky, such as the country’s largest locally-owned processor Bega Cheese, which shares fell 9.3% earlier this year after the firm was unable to access some of its produce due to ruined roads and transport logistics.

The company expected to lose close to two million litres of milk supply – but emphasised that this amount, some 0.2% of its annual supply, would not impact its operations either.

In a statement to the Australian Stock Exchange, Bega Cheese said that the fires had had minimal direct impact on the company, milk supply, or operations, but had a ‘significant impact on farmers and employees’​.

“As the remaining road access restriction is lifted [and] full milk supply resumes, the total volume of milk unable to be collected is expected to reach 900,000 litres out of an overall annual milk intake across the company of circa one billion litres,”​ said Bega.

“In addition, two suppliers have decided to dry their herds off earlier than planned because of the fires and this may reduce milk supply by up to a further one million litres. These milk losses will have no material overall impact on Bega’s operations.”

Dairy farmers hit hard

On the other side of the coin though, dairy farmers with herds in the bushfire-affected locations have had a very tough time of it.

Farmer Steve Shipton was forced to shoot and euthanise several of his cattle which were too badly burned to survive – some of them mere calves.

"You don't want them to suffer,"​ he told 7News​, estimating he had lost about 25 cows to the fire.

Shipton was not alone – many other farmers faced the same cruel reality of having to either shoot badly burned or injured cows or sending them to the abattoir.

“It destroys you [to] shoot your own cattle. [I] take pride in my cattle, to have them in good condition. And to do this, it's just not right,”​ Travis Attree told BBC​.

As of January 7 2020, the New South Wales Department of Primary Industries reported that  the number of livestock that had been killed or euthanised as a result of the fires had hit almost 5,200.

Dairy Australia numbers also estimate that dairy production will overall fall by some 3% to 5% as compared to the last financial year, where numbers had already fallen to less than nine billion litres due to climate and other factors – the lowest for the country in over 20 years.

Related topics: Markets, Oceania, Supply chain, Dairy

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