Dairy farmer details financial, mental toll from Beston closure and drought

The effects of the Beston closure has been far-reaching for Brad Fischer's business at Meningie.

Meningie dairy farmer Brad Fischer says the significant amount of money owed to producers following the closure of the Beston Global Food Company was a total double whammy when coupled with the worst season in a century.

"I'm a farmer - I signed up for droughts and flooding rains - what I didn't sign up for was not being paid," he said.

"The farm could have weathered the drought, and probably could have weathered the Beston situation, but with both of them, it's extremely challenging."

Mr Fischer has $760,000 owing from Beston. He said that, coupled with the $500,000 it cost him to produce the milk supplied, the total hit was closer to $1.2 million.

The effects of this loss have been far-reaching for the business.

"I used to employ 14 people and I had to let go six of them, and that was the hardest day I've had in 20 years of farming," he said.

Mr Fischer also used to run 600 cows and 200 of them had to be sold to save feed and generate income.

As well as the dairy, Mr Fisher also crops 2500 hectares, and last season about 20 per cent of what's usually produced came off.

"It's been the worst drought we've seen in 100 years," he said.

So the news this week that South Australian Dairyfarmers' Association had secured a $3 million support package from the state government was "absolutely welcomed".

"SADA has done a great job securing this $3m," Mr Fischer said.

Mr Fischer said these funds were particularly important as he was not hopeful of securing any significant amount of recouped funds through the liquidation process.

SADA president Robert Brokenshire said a particularly positive aspect of the support package was the flexibility to what the grants could be spent on, including investing in farm modifications, paying invoices or accounts, or reduce working capital debt facilities.

"Obviously, with what happened with Bestons, farmers haven't necessarily been able to pay their creditors, and that has a broader impact on the region in which they farm and work," he said.

Mr Brokenshire said SADA had been working with the state government for several months to secure the package.

"It's been welcomed by farmers who supplied Bestons but also by the whole dairy industry, which needs to keep a critical mass for the sustainability and viability of dairy in SA," he said.

The application form to secure funding is being finalised this week for farmers to fill out.

"There will then be a pressing need for farmers to get these forms back to SADA as an urgency," Mr Brokenshire said.

"The Treasurer will then sign the whole lot off as a package."

Mr Brokenshire said this support to Beston farmers was paramount to the sustainability of the billion-dollar SA dairy industry.

He said Beston farmers had taken a double hit with the impact of a severe drought further complicated by not receiving significant milk payments for milk they had produced.

Farmers were owed about $11.6m at the time of administrator KPMG's appointment in September last year.

Beston was eventually placed into liquidation on February 21.

Some of the details of Beston's financial woes were detailed in a report by administrator KPMG in February.

Secured creditor National Australia Bank was expected to be repaid 26 cents to 34c in the dollar of the $53m it was owed, but it was unclear whether farmers would see any return on what they were owed ($11.6m) due to the fact they were unsecured creditors.

The report said Beston companies may have been insolvent from April 2024.