New ways to work with Lion
Farmer partnerships are pivotal to the success of our dairy business.
As part of our turnaround, we have made a commitment to shift our relationships with fruit and milk suppliers towards a genuine partnership approach. We have begun by listening to farmers, and responding with a clear growth strategy, competitive pricing, flexible contract options and other initiatives designed to help farmers increase volumes and efficiency. Where we can, we’re helping to reduce milk-price volatility, improve transparency and build secure relationships that give each of us more confidence to invest and grow sustainably.
We don’t believe in one-size-fits-all, national pricing – we view each region as unique and subject to different dynamics. Our new season contracts have offered farmers compelling pricing, attractive tenure and other benefits, tailored to each market. In an increasingly competitive market, we have been very encouraged with the takeup and feedback from farmers to date.
In Far North Queensland, we announced a record five cents per litre milk price increase in July, along with further increases in South-East Queensland and New South Wales. The increases position Lion as the clear price leader across these regions and signals our confidence in the vibrancy of the industry and our own growth strategy.
In the Southern states, Lion has introduced a new pricing model for direct suppliers that allows farmers to choose from a range of competitive options, including opportunities to lock in pricing of up to 50 per cent of volumes over three years – delivering the most secure pricing offer available in the market today. Thus far, the fixed price contract option has been very popular, with many farmers embracing the opportunity to reduce the impact of price volatility in their businesses – allowing more confident planning and investment decisions, and peace of mind.
We are also reconnecting our business to local farming communities. One example is our recent embrace of the heritage ‘Malanda’ name in a rebrand of our Dairy Farmers Original Malanda milk. Coupled with a record increase in local farmgate pricing, this initiative has been an outstanding success. Since July, we have seen a 2 per cent retail uplift in sales of Dairy Farmers Malanda Original Milk, which equates to almost 5,000 litres of extra sales per week. And with farmers earning an extra five cents on every litre produced, this is a great outcome for farmers, our local Malanda plant and the local community. With the support of Far North Queenslanders, we will help ensure that the local dairy industry has a bright future, and that consumers from Cape York to Mt Isa and down to Mackay can continue to enjoy the goodness of fresh, local milk every day.
Adding further value to our farmer relationships in partnership with Landcare
Our 2014 Lion Landcare Grants have now been announced, with more than $132,000 in funding awarded to 13 farming families across five states. The Grants are open to all Lion direct milk suppliers, and focus on improving sustainability through reducing energy consumption, enhancing on-farm nutrient management and/or increasing biodiversity.
The program also helps showcase examples of sustainable land management, which not only improve the health of our land but also farmers’ bottom lines. Importantly, the farmers involved are measuring the tangible improvements their projects achieve, compiling data that can then be used to share insights and best practice with others.
The grants are a practical way to support real improvements on farm. Lion supplier Ellerby Dairy from QLD will be able to reduce fresh water consumption by 40 per cent with their Lion Landcare Grant. And Dwayne Neil, a Lion supplier from Boyanup WA, will significantly reduce his farm’s energy use.
For more information about the Lion Landcare Grants and other funding opportunities available through Landcare Australia, visit www.landcareonline.com.au.