Australia-Dairy farmers in turmoil.

AUSTRALIA.

DAIRY FARMERS WORRIED.

The United Dairy Farmers of Australia, say that the major milk processors are going to cut the farm gate price of milk.

The union says Fonterra has withdrawn the most recent payment increase to farmers, and Murray Goulburn are going to cut the price paid to farmers by 13% in February.These are the two largest processors of Australian milk.

This is going to have a direct effect on 2,000 dairy farmers, across the state of Victoria, the main dairy region.

The union says that they are stunned, as they believed that members would be receiving the contracted prices, until the end of the financial year 30 June 2009.

There has been a marked decrease in export of dairy products from Australia, caused by the global downturn, which has increased supplies in the domestic market.

Meanwhile the Warmambool Cheese and Butter and National Foods who are the other two large players in the industry, have formed a joint venture called the Australian Cheese Company Pty Ltd. The new company will operate the cheese business of Dairy Farmers Australia.

The new company will be owned 50-50 by both companies and process and promote the cheese making industry, will packing cutting and brand labeling of product.