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How Dairy Farmers Can Benefit from Embryo Surrogacy

Boost your income with embryo surrogacy. Could renting your cows’ uteruses be your farm’s following ample cash flow?

Summary: Embryo surrogacy offers a promising way for dairy farmers to earn extra income by using dairy cows as surrogate mothers for beef cattle embryos, solving the beef industry’s excess embryo problem and achieving higher conception rates. Farmers benefit from premium prices for these calves, potentially boosting the commercial beef herd and requiring excellent management. In Ohio, Jake Osborn and his son Wyatt partnered with a dairy farm, turning leftover embryos into six live newborns, showcasing this method as a viable extra cash source.

  • Dairy cows can be surrogate mothers for beef cattle embryos, turning a surplus problem into a profitable solution.
  • Utilizing dairy cows for embryo surrogacy can yield higher conception rates compared to traditional methods.
  • Farmers receive a premium price for embryo calves, offering a potential boost in income.
  • This practice can contribute to rebuilding the commercial beef cattle herd in the U.S.
  • Successful implementation requires excellent management and knowledge of nutrition and calf care.
  • Innovative collaborations, like the one between Jake Osborn and an Ohio dairy farm, demonstrate the viability of this method.
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What if I told you that your dairy farm might make additional money by “renting out” its cows? Yes, you read it correctly. Consider your cows as surrogate moms. The current income trend for dairy farms is to get into embryo surrogacy, a relationship that offers high financial rewards. Intrigued? You should be. “Right now, there are so many more embryos sitting in tanks than sitting in cows,” said show stock photographer J. Brad Hook, host of the “Genuine JBH” podcast.

From Manure to Methane: The Creative Ways Dairy Farmers are Cashing In 

Have you ever wondered how dairy farmers generate additional money besides selling milk? They are investigating new income sources, such as making composted manure a viable commodity for gardeners and farmers. It benefits the environment as well as their pocketbook.

Then there’s the increase of beef-cross calves. Farmers are capitalizing on the increased demand for meat by mating dairy cows with beef animals. These crossbred calves are reasonably priced, offering another revenue stream.

Not to add, some farms are becoming innovative with their resources. Consider producing methane-powered energy from cow poo! These farms are decreasing waste and lowering energy costs, with some even selling excess power back to the grid.

Have You Ever Thought About Renting Out Your Cows’ 

Have you ever wondered how dairy farmers make extra money besides selling milk? They are looking at additional revenue streams, such as making composted manure a marketable item for gardeners and farmers. This helps both the environment and their wallets.

Then there’s a surge in beef-cross calves. Farmers are capitalizing on the rising demand for meat by breeding dairy cows with beef animals. These crossbred calves are affordably priced, providing another money source.

Furthermore, some farms are becoming very resource-efficient. Consider generating methane-powered energy from cow dung! These farms are reducing waste and cutting energy costs, with some even selling extra energy back into the grid.

But you might be wondering why the beef industry needs this innovation. 

But you may be asking why the meat market needs this innovation.  According to J. Brad Hook, the supply of embryos has far outpaced the availability of beef recipient animals, particularly in today’s high-dollar-value beef sector. “Recip cows are now too costly to acquire. Custom beef recipient herds are fully booked and have significantly raised their rates owing to the worth of the animals,” he said.

Jake Osborn, a club calf producer from Lynchburg, Ohio, also contributes, emphasizing the financial benefits of this relationship. “At my location, a 20-30% fertilization rate on embryos was very normal, which is not favorable to producing money,” Osborn told me.” “Currently, we’re running 55-70% conception in the dairy cows, which is way better on IVF embryos than I’ll ever do at my house.”

Furthermore, Osborn highlights the practical advantages for dairy producers. “The dairy is capable of synchronizing a huge number of recipes simultaneously. “You can get a whole string of calves from the same mating, born just a few days apart,” he stated.

Embryo surrogacy is a possible answer to some of the beef industry’s most urgent issues, particularly the high cost and scarcity of meat-recipient cows. J. Brad Hook summarized it: “Right now, there are so many more embryos sitting in tanks than in cows.” This novel strategy has the potential not only to ease those concerns but also to generate new cash for dairy producers.

Jake Osborn’s Creative Collaboration: Turning Dairy Surrogacy into a Profitable Venture 

Jake Osborn’s collaboration with an Ohio dairy farm demonstrates the possibility of embryo surrogacy to improve dairy profitability. Osborn and his son Wyatt worked with an 800-cow dairy to repurpose leftover embryos. Beginning with a small experiment of nine embryos, they produced six live newborns owing to the dairy’s synchronized breeding cycle and strict care for the cows’ health.

Osborn stressed the benefits of cooperating with the dairy farm, citing a substantially higher conception rate—55-70% vs 20-30% on his farm. The dairy’s success stems from its precision breeding procedures. The resultant calves had no difference in development or conformation from their dam-reared counterparts, demonstrating the attentive care given by the dairy workers, whom Osborn rewarded with incentives depending on the calves’ selling price.

Financially, the venture was profitable for both sides. The dairy earned a much higher price for the embryo calves than for its beef-cross calves, giving a consistent extra cash source. Meanwhile, Osborn successfully brought excellent embryos to life, providing buying families with gentler, well-handled show calves ideal for young handlers. This partnership demonstrates how innovation in agricultural operations may result in win-win situations for all parties involved.

Why Embryo Surrogacy Could Be Your Farm’s New Cash Cow 

The advantages of using embryo surrogacy for dairy producers like yourself are many and considerable. One of the key advantages is that dairy cows have more excellent conception rates than average beef recipients. You may wonder why conception rates are crucial. Higher conception rates result in more successful pregnancies, calves, and, eventually, more money.

Furthermore, you may charge higher fees for calves born from these embryos. Osborn said the dairy earns more than the already healthy $800–$900 per head for beef-cross calves. This assures a consistent and profitable revenue stream, providing a valuable financial buffer to your conventional dairy business. It’s all about maximizing each cow’s potential in your herd, increasing their value.

So, if you’re seeking a strategy to increase your farm’s profitability and efficiency, embryo surrogacy might be the creative option you’ve been looking for. It’s a win-win scenario, with more results for the same work.

The High-Quality and Family-Friendly Calves Emerging from Embryo Surrogacy

The calves born via embryo surrogacy have shown exceptional quality and demeanor. Regarding development and conformation, Osborn’s calves are indistinguishable from those raised in dams. This high level of quality is mainly due to the meticulous care given by the dairy’s outstanding caretaker, who ensures that the calves flourish and achieve high standards.

Furthermore, the temperament of these show calves has proven beneficial. Families that purchase these calves are especially impressed with their gentle attitude and willingness to lead, making them perfect for young caretakers. Osborn pointed out, “You can buy one for your 10-year-old without worrying about them getting hurt.” This temperament difference provides customers with peace of mind and distinguishes surrogate-born calves.

If You’re Wondering About the Bottom Line, Let’s Break It Down 

If you’re curious about the bottom line, let us break it down. Traditional beef-cross calves cost a reasonable $800-900 per head. However, the cost of embryo surrogacy is much higher. Consider Osborn’s business, for example. His carefully nourished embryo calves fetch prices that exceed this baseline, often at a premium to conventional procedures.

Let’s try some elementary math. The difference is startling if a typical beef-cross calf earns $850 on average and an embryo calf earns $4,000-$5,000 per head. Even at a lesser cost of $4,000, the income is over five times higher (4,000 / 850 = around 4.7). Multiply this by 150 calves, and your potential profits rise from $127,500 to an impressive $600,000. That’s before you factor in any extra expenditures.

The price per calf isn’t the only important aspect here; teamwork also results in more excellent conception rates and simplified operations. This increased efficiency and premium pricing make embryo surrogacy a feasible and perhaps transformational option for your dairy farm.

Weighing the Risks: Challenges Every Dairy Farmer Should Know About Embryo Surrogacy

Of course, every opportunity has its own set of problems and hazards. Embryo surrogacy is no exception. Let’s start with the initial investment expenses. While the rewards might be substantial, starting up may need a considerable initial investment. You will need to acquire high-quality embryos, which are not inexpensive. Not to mention the expenditures associated with hormonal synchronization and veterinary care. This may make some farmers afraid to enter this terrain.

Then, there’s the requirement for specialized expertise. If you’re considering embryo surrogacy, you should be prepared to learn new skills or employ someone who already does. The technological know-how used during embryo implantation may significantly impact the success rate. It’s not just about implanting an embryo in a cow; it’s about doing it correctly to increase your chances of a healthy pregnancy.

During the procedure, complications may emerge. Even with experienced hands at work, conception rates may be a problem. Mistakes in hormone delivery or timing might result in unsuccessful implantations. Furthermore, if the receiving cow has stress or health concerns, it may undermine the whole operation. Calves may not flourish as predicted, introducing another degree of danger. Embryo transfer is both an artistic and a scientific process.

The Sky’s the Limit: Unlocking New Horizons with Embryo Surrogacy 

Looking forward, the possibilities for embryo surrogacy business options are endless. Consider bespoke raisers that specialize in raising embryo calves from birth and developing them into high-quality show cattle. This might be game-changing for purebred cattle ranchers looking to expand their herds without the trouble of controlling pregnancies.

Another promising option is to use dairy cows to help restore the commercial beef cattle herd in the United States. Did you know the nation’s beef herd is now the lowest it has been in over 70 years? Dairy cows calving out beef embryos may provide a much-needed remedy. This methodology might increase beef output by giving a more consistent and efficient means of herd growth.

These prospects don’t simply benefit the cattle business. They’re also a lifeline for dairy farmers wanting to diversify their revenue sources in an age when every dollar matters. So, why not pursue this novel path? Your farm might be at the forefront of a whole new specialized industry in agriculture.

The Bottom Line

For dairy producers, diversifying revenue sources is more important than ever. From innovative methane-powered energy to beef-cross calves, new avenues are opening up for extra money. Embryo surrogacy, the newest game-changer, benefits the dairy and meat sectors. By taking advantage of dairy cows’ natural reproductive cycles, you may pay a premium over market prices for embryo calves. Consider how this may fit into your organization after seeing how Jake Osborn is benefiting from it. It’s not only about making additional money but also maximizing resource use and increasing the commercial beef cattle herd. Consider renting out your cows’ uteruses since this might be an untapped specialty.


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Dairy Cooperative Pushes for Timely Payment Rule in Farm Bill to Protect Farmers

Can timely milk payments protect dairy farmers? Discover why Edge Dairy Farmer Cooperative is pushing for new rules in the farm bill to safeguard their livelihoods.

Imagine the dedication of a dairy farmer, tending to a herd of cows before sunrise every day, regardless of the season. This commitment is not just a personal choice but a crucial part of maintaining the stability of the dairy industry. Dairy cooperatives play a significant role in this, providing regular payments and assisting farmers in selling their milk, thereby ensuring the industry’s stability.

Processors under the Federal Milk Marketing Orders (FMMO) must pay farmers at least twice a month. Still, not all milk is insured by the FMMO, which increases financial risk.

Tim Trotter of Edge Dairy Farmer Cooperative says, “The risk we have right now, especially in the upper Midwest, is there’s an increasing amount of milk deployed and not covered by the FMMO.”

The issue of timely payments is not just a financial concern but a matter of urgency. Farmers in Minnesota, Wisconsin, northern Iowa, northern Illinois, and eastern North and South Dakota areas, where most of the country’s milk is outside the marketing pool, live in financial instability without the legal mandate for timely payments. Immediate action is needed to address this pressing issue.

Delayed payments affect individual farmers and have a ripple effect on the community’s well-being and agricultural operations. To prevent such social and economic disruptions, the farm bill needs to clearly outline and enforce conditions regarding timely milk payments.

The Untold Challenges of Depooling: Navigating the Complexities of Federal Milk Marketing Orders (FMMOs) 

Federal Milk Marketing Orders (FMMOs) guarantee producers are paid fairly and help maintain steady milk prices. These rules help manage cash flow and financial stability by requiring milk processors to pay dairy farms at least twice a month.

But “depooling” ruins this mechanism. Milk is taken from the controlled price pool depools, exempting it from the FMMO payment schedule. This might result in uneven and delayed payments, significantly affecting farmers in places where much milk is deployed.

Risk of Financial Instability for Dairy Farmers in Federal Order #30: The Urgency for Timely Payment Requirements

For farmers, particularly those under Federal Order #30 covering portions of Minnesota, Wisconsin, Iowa, Illinois, North Dakota, and South Dakota, the absence of prompt payment obligations for deployed milk exposes particular dangers. Although processors pay farmers twice a month under FMMOs, this regulation does not cover deployed milk, exposing producers to payment delays.

This financial volatility is problematic, given that 30% of the country’s milk comes outside the marketing pool and might cause cash flow problems. Delayed payments impede everyday spending, long-term sustainability, and farm upkeep.

Producing most of the deployed milk, farmers under Federal Order #30 need more with quick payment assurances. Legislative action mandating prompt payment for all milk might provide more security and assist in operational management and growth by farmers.

Advocating for Dairy Farmer Security: Why Timely Milk Payment is Crucial for Federal Order #30 Farmers

Under Tim Trotter’s direction, The Edge Dairy Farmer Cooperative seeks timely milk payments included in the farm bill. They contend this will financially safeguard dairy producers, particularly in milk deploying cases from Federal Milk Marketing Orders (FMMOs). Historically, processors have paid on time, but this is only assured with a legislative mandate. About thirty percent of the milk in the country is outside the marketing pool. Hence, prompt payment policies are significant for farmers—especially those under Federal Order #30—to minimize financial uncertainty.

Unbiased Milk Quality Assessments: The Imperative of Third-Party Verification Services for Accurate Component Testing

Verification services guarantee accurate and consistent milk component testing. These outside assessments validate the tools used to evaluate milk components like lactose, fat, and protein. This ensures exact measurements, which directly impact financial stability and payment computations. These services should be codified in the agriculture bill. It guarantees precise and objective quality tests for every dairy farmer, even those with deployed milk, safeguarding their income and encouraging industry openness.

The Bottom Line

Protecting dairy producers impacted by milk depooling depends on the farm bill, which includes prompt payment rules and verification tools. Verifying third-party milk quality and requiring processors to pay twice monthly helps lower financial risks and ensure correct pay. These steps support a consistent agricultural economy and guarantee the stability of the more significant dairy sector.

Key Takeaways:

  • Federal Milk Marketing Orders currently require processors to pay dairy farmers at least twice a month.
  • Farmers face a growing risk, particularly in the upper Midwest, as more milk is depooled and falls outside the protection of FMMOs.
  • Approximately 30% of the nation’s milk is outside the marketing pool, with many affected farmers in Federal Order #30 covering parts of the Midwest.
  • The cooperative seeks to ensure the payment requirement is legally mandated to guarantee its continuance.
  • Third-party verification services for component testing are also needed to ensure accurate milk checks, especially for depooled milk.

Summary:

Dairy farmers are vital to the dairy industry’s stability, providing regular payments and assisting in milk sales. However, not all milk is insured by the Federal Milk Marketing Orders (FMMO), leading to financial risk. Farmers in certain areas, such as Minnesota, Wisconsin, northern Iowa, northern Illinois, and eastern North and South Dakota, face financial instability without legal mandates for timely payments. Depooling disrupts the FMMO mechanism, causing uneven and delayed payments and impacting cash flow and farm upkeep. The Edge Dairy Farmer Cooperative advocates for timely milk payments in the farm bill to safeguard dairy producers, especially those under Federal Order #30. Codifying verification services in the agriculture bill would ensure accurate and consistent quality tests for every dairy farmer, safeguarding their income and encouraging industry openness. Protecting dairy producers impacted by milk depooling depends on the farm bill, which includes prompt payment rules and verification tools. Ensuring third-party milk quality and requiring processors to pay twice monthly can lower financial risks, support a consistent agricultural economy, and provide dairy sector stability.

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Australian Dairy Industry Worries Over Fonterra’s Local Business Sale: Market Consolidation Concerns Emerge

Find out why Fonterra’s sale of its Australian dairy business is raising worries about market consolidation. What will this mean for local farmers and consumers? Read more.

Fonterra’s decision to sell its consumer brands is a significant event that is reshaping the global dairy industry, including the Australian sector. This strategic shift, which prioritizes B2B and ingredients despite the consumer division’s financial success, has raised concerns among local stakeholders about market concentration and its potential impact on Australian dairy producers and consumer choices.

As the Business Council of Cooperatives and Mutuals (BCCM) stated: 

“The announcement by Fonterra that it intends to sell its Australian dairy processing assets is yet another blow to dairy farmers and a reminder about the precarious nature of our food security when staples like milk are passed around like commodities.”

Key concerns include: 

  • Market consolidation reduces competition and local control.
  • Pressure on farm gate prices, possibly forcing farmers out of the market.
  • The risk of a supermarket duopoly, limiting consumer choices and raising prices.

The issues at hand underscore the pressing need to promptly reassess market dynamics. This is crucial to secure the long-term sustainability of Australia’s dairy industry, a vital part of our nation’s economy and food security.

Fonterra’s Strategic Pivot: Divesting Consumer Brands to Strengthen B2B and Ingredients Focus

One of the major players in world dairy, Fonterra, is changing its approach to concentrate on its B2B and ingredients division. Selling well-known consumer brands, including Anlene, Anchor, and Fernleaf—despite their gross earnings in FY2023 of NZ$781 million (US$481.9 million—this move entails selling these companies notwithstanding Revenue sources indicates another tale, though the consumer sector accounted barely 7% (NZ$3.3 billion / US$2.4 billion). The food service industry brought 13% of total income (NZ$3.9 billion / US$2.4 billion). Comprising 80% of revenue and producing NZ$2.6 billion (US$1.6 billion) in gross profits, the ingredients industry dominated. Aiming to simplify processes, emphasize core competencies, and react to consumer and food service asset interests, this strategy change is meant to streamline operations.

Financial Data Illuminates Fonterra’s Strategic Shift 

Fonterra’s latest financial results support their strategy change. From a modest 7% of sales, the consumer division brought in NZ$781mn (US$481.9mn) in gross profits in FY2023. With nearly 13% of sales (NZ$3.9 billion/US$2.4 billion), the food service industry produced NZ$749mn (US$462.2mn) in gross profits. With 80% of total sales (NZ$17.4bn/US$10.7bn), the ingredients business led with gross earnings of NZ$2.6 billion (US$1.6 billion).

Substantial consumer and food service revenues nonetheless indicate Fonterra’s main strength—that of ingredients. Fonterra wants to improve long-term value by concentrating on its best-performing channels—ingredients and food service—involving Unwanted interest in areas of its company also drives the choice; this is a perfect moment for disposal to reallocate funds and improve its principal activities.

Fonterra’s Comprehensive Global Strategy: Streamlining Operations with a Focus on B2B and Ingredients

With its intentions to leave the Australian market and divestiture of consumer brands in Sri Lanka, Fonterra’s new approach centers on its B2B and ingredients business and CEO Miles Hurrell pointed out shedding companies including Anlene, Anchor, and Fernleaf, “While these are great businesses with recent strengthening in performance and potential for more, ownership of these businesses is not required to fulfill Fonterra’s core function of collecting, processing and selling milk.”

Hurrell clarified the strategy turnaround: “More value would come from focusing our Ingredients and food service channels and freeing money in our Consumer and related companies. Disposing these businesses would enable a more straightforward, better-performing Co-op with an eye on our core Ingredients and food service sector. We have also had an unwanted interest in several of these companies; hence, this is a good moment to review their ownership.

Aiming to strengthen its presence in the worldwide market, where B2B and ingredient categories offer more profitable prospects, the divestments in Sri Lanka and Australia are part of a bigger plan to maximize operational efficiency and capital allocation.

Concerns Over Consolidation: Potential Ripple Effects on the Australian Dairy Market 

The local dairy industry is alert about how Fonterra’s divestiture may affect the Australian market. Rising market consolidation especially worries the Business Council of Cooperatives and Mutuals (BCCM). They contend this would concentrate dairy asset ownership within a small number of powerful companies, therefore lowering competition.

BCCM cautions that this consolidation might harm dairy producers by lowering their bargaining strength at the farm gate. When market power centers on one entity, farmers may be pressured to accept reduced milk prices to meet shareholder profits. This might threaten smaller, independent farms, compromising the industry’s variety and resilience.

Customers might also experience this. Price increases at retail establishments run the danger given that fewer businesses manage processing and distribution. BCCM observes that this could result in fewer options and more expensive essential dairy products.

The possible loss of local authority over dairy assets raises even another issue. Emphasizing more profitability than community and farmer wellbeing, BCCM notes that foreign and corporate ownership may eclipse local interests.

BCCM supports increased primary producer participation in the value chain to offset these risks. They see cooperatives as essential for giving dairy farmers the negotiating strength they need to flourish in Australia’s mostly deregulated and export-oriented market. Supporting cooperatives helps the industry protect its stability and sustainability against the forces of market concentration.

Potential Consequences of Fonterra’s Australian Asset Divestment: Market Concentration and Its Ripple Effects 

Fonterra’s choice to sell its Australian consumer businesses begs questions about further market concentration. Like the supermarket duopoly in New Zealand, this action may result in a few powerful companies controlling the market. Such consolidation may marginalize independent, small dairy farms and processors, lowering their market impact.

Two big supermarket chains’ dominance in New Zealand caused an imbalance in negotiating strength, which drove down farm gate pricing and compressed profits for local dairy producers. Should this happen in Australia, some farmers may be driven out of the sector by cost constraints and declining profitability. Therefore, Farmers and customers would be affected by this, influencing product diversity, price, and market rivalry.

The regulatory clearance for Coles’ purchase of Australian Saputo processing facilities points toward retail ownership over processing becoming the norm. Should this continue, milk manufacturing may merge even more into retail chains, emphasizing cost over innovation or quality, which would reduce market dynamism.

Encouraging the adoption of robust cooperative models is not just a solution but a beacon of hope in the face of these challenges. These models have the potential to empower Australian dairy producers, increasing their share in the value chain and enhancing their negotiating strength. By promoting a cooperative approach, we can help the sector maintain the diversity and resilience of the Australian dairy market and mitigate the potential negative consequences of market concentration.

Future Pathways: Strengthening Dairy’s Horizon Amid Consolidation Concerns 

The choices Australia’s dairy sector must make now will determine its direction. Thanks to increased consolidation, larger companies might be able to dominate, perhaps pushing out smaller farms and lowering competition. However, consumer choices and farm gate pricing may suffer from this change.

Still, a different route highlights how cooperatives strengthen leading producers. The collective negotiating strength provided by cooperatives guarantees a fairer market, more balanced pricing, and equitable profit distribution. Participating in the whole value chain—from manufacturing to distribution—improves farmers’ economic resilience and negotiation power against more powerful companies.

Moreover, cooperatives may promote sustainable agricultural methods that match environmental and financial objectives. Establishing a robust cooperative movement within the Australian dairy industry guarantees food security, variety, and quality for customers, as well as stability and protection of livelihoods.

Using co-ops and including primary producers in the value chain will determine the industry’s destiny. These tactics may let the dairy industry negotiate consolidation difficulties and emerge stronger and fairer globally.

The Bottom Line

Fonterra’s calculated choice to sell their consumer brands and concentrate on B2B and ingredients represents a significant change. This action seeks to simplify basic procedures even if consumer sector financial performance is excellent. However, the Australian dairy sector has expressed worries about market concentration. Essential concerns include:

  • Possible consumer price increases.
  • Effects on nearby dairy farms.
  • The possibility of a retail duopoly pressuring farm gate pricing.

Examining this divestiture process closely is vital if we safeguard industry stability and advance cooperative models that empower farmers in the value chain. Maintaining the interests of every Australian dairy industry stakeholder depends on a balanced, competitive market.

Key Takeaways:

The recent strategic pivot by Fonterra, which involves divesting its consumer brands to concentrate on its B2B and ingredients business, has raised significant concerns within the Australian dairy sector. The decision, influenced by various financial metrics, is seen as both a commercially sound move for Fonterra and a potential risk for market consolidation in Australia. 

  • Fonterra plans to divest its consumer brands such as Anlene, Anchor, and Fernleaf globally.
  • The decision follows a strategy shift to focus on B2B and ingredients business despite strong performance in the consumer sector.
  • FY2023 data reveals that the consumer business generated NZ$781mn in gross profits, surpassing the foodservice business.
  • The ingredients business remains the largest revenue contributor, making up 80% of total revenue.
  • Fonterra’s exit from the Australian market includes divestment of its consumer, foodservice, and ingredients businesses.
  • Concerns have emerged within the local dairy sector regarding market concentration and its impact on dairy farmers and consumers.
  • Australia’s Business Council of Co-operatives and Mutuals (BCCM) highlights the potential for increased market dominance by large business interests and its implications on farm gate prices.
  • There is a growing sentiment that co-operatives may be a key solution to maintaining bargaining power for dairy farmers.

Summary:

Fonterra is reshaping the global dairy industry, including the Australian sector, by focusing on its B2B and ingredients division. This strategic shift has raised concerns about market concentration, potential impact on Australian dairy producers, and consumer choices. The Business Council of Cooperatives and Mutuals (BCCM) criticized the announcement, stating that market consolidation reduces competition, local control, pressures farm gate prices, and risks a supermarket duopoly. Fonterra’s financial results show that the consumer division generated only 7% of total income in FY2023. The ingredients industry dominated, accounting for 80% of revenue and $2.6 billion in gross profits. The Australian dairy industry is concerned about Fonterra’s divestiture, which could lead to market consolidation and lower competition. BCCM supports increased primary producer participation in the value chain.

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