Worse Is Yet To Come?, page-321

I agree using legislation to put a floor price on raw milk wont work, that is a reminder of the dark periods of the past. Some farms won't survive using pure market based pricing but right now the pendulum has swung too far the other way and burden is being pushed on to dairy farmers in complex ways that I consider unreasonable and go beyond a sound commercially viable basis between farmer/supplier and processor.

This clawback arrangement is one such unreasonable arrangement, although one can see how it has evolved to being what it is today since valuing milk at a point of collection gets complicated but using the global markets for finished product as a means of recovering costs from the milk producer is one step too far.

Maybe it is time for Australia to have a derivatives market for pre-processed milk run by a non-diary entity (i.e. ASX).

This could also help drive independence of MGC using the GDT to price its FGMP and then Fonterra hop on to the Bonlac "me-too" bandwagon for its pricing.