Recent comments by: Bernhard
If MR Saputo thinks that by having his factories running at 97-98% utilization will help him get more milk into MG he is dreaming and does not understand the dynamics and what has got the Australian dairy industry to this point of collapse. By achieving those levels of factory processing efficiencies, he will have the least profitable farmers in the southern milk pool. They would of created a supply base with the highest on-farm cost profile along with the highest on-farm risk profile. They would need to pay a milk price premium of at least $1.00 kg/ms above the rest of the market. Does Saputo have the product mix that can justify that sort of factory efficiencies? When Saputo's product mix is basically value-add commodity products, not short self-life daily fresh products. Saputo and for that matter all processors need to have more focus on the on-farm cost structures and processes of their suppliers otherwise they will be building their business on some very unstable and weak foundations. It is not just paying the highest milk price with the only objective being your factory efficiency and highest profit when the exact opposite will be true for the farmers that supply milk to you. They may receive the highest price but be the least profitable in the southern milk pool. Running at 70% plant utilization just might grow your milk pool along with the rest of the industry that would better share the risk and profit from that milk. Something to think about.