Mount Gambier dairy farmer John Hunt hopes changes will be made to ensure dairy farmers don’t lose out if there’s another collapse similar to Beston Global Food Company’s closure a year ago.
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Beston’s collapse left 41 suppliers owed a combined $10 million when the milk processor ceased operations in December 2024.
John, who farms with his wife Karen, milking 450 cross-breds, and son Daniel and his wife Sam, milking 300, lost $700,000, and is still hurting financially and mentally.
“It has taken its toll, especially mentally, because it feels as though they lied to us and that hurts,” he said.
“It’s one thing to lose money; another to be lied to when they tell you it will be all right, but when it goes under, you can’t get hold of anyone.”
South Australia Dairy Association is also calling for legislative changes and wants dairy farmers to be recognised as secured creditors in any future collapses.
John said impacted farmers wanted to put the collapse behind them, but they wanted to make sure it didn’t happen again.
“The industry needs to change,” he said.
“If banks know that a business is failing, it should be standard that administrators come in earlier.
“You need as many eyes to look over the business as you can to give it the best chance to survive.
“At the moment, by the time the liquidators get there, all the money goes to the secured creditors and liquidators, not to the farmer suppliers.
“I know they were seeking advice from administrators, but at the time didn’t have to go into administration.
“If they had gone in early and said they had a plan to get out, we would have all stayed with them, but I guess we’ve got to take some of the blame because we were a bit deaf to the noise.”
John said farmers remained annoyed about the dispersal of products.
“There was $8-9 million worth of product still sitting in the warehouse, and we didn’t get paid for it, but it went to paying the bank and other secured creditors,” he said
“The banks were good, but I believe that if they can’t get funding or see a problem, they should bring in administrators.
“We complained about it, and they said it was just the law. Well, the law needs a bit of a tweak.”
John also believes there needs to be more accountability for directors and CEOs.
“If directors go to court and can’t trade again or go on a board, that doesn’t mean much to them.
“By the time Beston really got in the hole, if we left, we would have lost a lot of money.
“They had promised us they had a sale on the books and if we left, it would have hurt everyone, so you felt a loyalty to stay and ride out the process.
“We did, but it ended up costing us hundreds of thousands of dollars.
“I’d probably still do the same because you don’t want to do anything to jeopardise other farmers.
“That’s who farmers are, but I can’t understand how that product was ours, because we hadn’t been paid for it, but it gets given to other people.”
John said the refund from the South Australian Government helped, but he didn’t expect to get any more money from the ongoing liquidation process.
Despite it being the worst financial hit in his dairying career, John is now looking ahead and enjoying a good relationship with new processor Bega, and says the good season is lifting spirits.
“We had tougher times when floods hit in New Zealand and we lost cows,” John said.
“You love your livestock, and if your animals are suffering, that’s the worst thing that can happen.
“We’ve learned to be more efficient, we’re getting paid straight from the vat and splitting payments to get paid twice a month.”
SADA president Robert Brokenshire said farmers would struggle for a long time as a result of the losses.
“No family farming business recovers easily from losing hundreds of thousands,” Robert said.
Farmers are still very hurt, and so they should be. It has been incredibly stressful for them and an enormous strain on their overdrafts”
He said the $3 million SADA got from the government to help affected farmers helped their cash flow, but they deserve all their money.
Robert said there could be opportunities for a class action to try to reclaim the lost money.
“Those farmers are still entitled to that money and need that money,” he said.
SADA is considering a campaign to the government to ensure dairy farmers become secured creditors.
“It’s still going through liquidation, but there could be a possibility of going to government and saying surely dairy farmers should become secured creditors,” Robert said.
“That processor wouldn’t have had a business without the farmers’ milk.”