Dairy Farmers Milk Cooperative (DFMC) has announced new milk contracts offered to dairy farming suppliers as part of the National Foods proposal to acquire Australian Co-operative Foods (ACF), which trades as Dairy Farmers.

DFMC Chairman Ian Zandstra said the new contracts had been issued following the Australian Competition and Consumer Commission's (ACCC) decision to issue a draft determination, which proposes to authorise for five years both the milk pricing and milk purchasing policies between DFMC and ACF, and the payment of the prices agreed between DFMC and National Foods in respect to the new milk contracts.

While it is not yet known whether the ACCC will issue a final determination authorising the conduct, it is ACF’s and DFMC's expectations that the ACCC will do so.

The new milk contracts are currently being issued to DFMC suppliers in Queensland, New South Wales, Victoria and South Australia.

“Subject to authorisation by the ACCC, attractive milk prices have been agreed until June 30, 2010 and after that date, DFMC will negotiate ongoing milk prices with ACF, which has indicated an intention to pay DFMC suppliers regionally competitive farm-gate milk prices,” Mr Zandstra said.

“As always, the actual price received by each individual farmer will depend on a range of factors including composition, quality, supply pattern, farm size and location.

“As such, I strongly encourage DFMC suppliers to contact their local DFMC Director or Farm Services Officer to discuss the new contracts in more detail.

“Of course, for National Foods’ proposal to succeed, it requires the support of 75 per cent or more of ACF active members who vote on the proposal.”

The proposal is also subject to a number of conditions, including a condition that new and existing suppliers to DFMC enter into revised milk supply contracts with DFMC for a minimum period to June 30, 2010 to secure certain regional minimum volumes of milk.