Dairy farmers across South West Victoria are once again feeling the pressure of supply chain instability, with the recent Frestine Dairy Australia disruptions causing uncertainty across the region. The disruptions have highlighted just how vulnerable supply chains can be and unfortunately, when buyers face financial difficulty or operational delays, the effects are felt immediately on the farm. Missed collections, delayed payments and sudden changes to long-term arrangements can place strain and stress on farming businesses that already operate under tight margins and demanding schedules.

For South West Victorian farmers, the current supply issues are a timely reminder of how important it is to know and understand the terms of your supply agreements. A well written contract is one of the strongest protections you have when the unexpected occurs. It presents your rights and obligations and outlines the steps you need to take in the event of a default.

At Maddens Lawyers, our farming and agribusiness lawyers work closely with farmers across the region. Our Managing Partner, Fiona Giblin, is a dairy farmer herself, which means we understand both the legal and commercial realities of running a farm. If you are unsure about your supply agreements, now is the time to review your contract. Our friendly team is ready to help you protect your business and income.

Why Victorian farmers should review their supply contracts now

Many farmers sign their supply agreements at the start of the season and then put them away, assuming everything is fine. But when a buyer or processor runs into difficulty, the fine print becomes important. Clauses that once seemed solid and straightforward suddenly determine what your next steps are and how much it will affect your business and your financial standing.

Taking the time to review your contract helps you:

• Protect your income and supply arrangements
• Respond quickly if circumstances change for either party
• Understand your rights if payments are delayed
• Avoid unintentionally breaching obligations
• Make informed decisions about switching buyers and ensure that a change in supplier does not cause you to default under your current contract

A contract review does not mean you are expecting the worst. It means you are ensuring you have the information and confidence needed to protect your business. Maddens Lawyers regularly advises farmers on their supply agreements whether they are dairy, livestock, grain or other agricultural contracts. You can learn more about our work with farming clients on our Farming and Agribusiness page.

If you have concerns about your supply agreements, speak with our Doyles Guide recognised agribusiness lawyers today.

Key contract clauses Victorian farmers should look out for

Whilst all supply agreements are different, they often share clauses that determine your rights as the farmer and outline your options if things go wrong. Understanding these clauses and how they affect you can help identify any risks early and take action before a disruption becomes a serious financial problem.

Below are the most important clauses to review.

Collection or delivery obligations

This section of your contract sets out how your produce will be collected or delivered. You should review:

• Collection or delivery schedules
• Volume commitments
• If the buyer has the right to vary or suspend collection and notice timeframes around that

If a processor's rights are broad when it comes to changing volumes or collection times, you may be exposed during periods of instability, like the recent supply issues with Frestine Dairy. Understanding and renegotiating these terms can help you plan ahead, negotiate change and take steps to reduce your risk.

If you are unsure whether your contract gives the buyer too much flexibility, our agribusiness team can review the terms and help you explore your options.

Termination rights

Termination clauses determine how and when either party can end the agreement. You should look for:

• Notice periods
• Grounds for termination
• Your rights if the buyer breaches the agreement
• Time limits for raising disputes if necessary

Some contracts are more flexible than others, yours may require lengthy notice periods if you or the buyer need to make changes. If your buyer is experiencing financial difficulty, knowing your termination rights can help you avoid breaching the contract or can protect you and your income if the buyer continues to fail to meet obligations.

If you need to terminate your contract, or your supplier has defaulted, contact our team at Maddens Lawyers so we can help you explore your legal options.

Exclusivity and supply restrictions

Exclusivity clauses can significantly limit your flexibility. You should understand:

• Whether exclusivity applies
• What happens if you breach exclusivity

Most contracts include an exclusivity clause, if yours does you may face problems if your buyer has financial issues. Breaching exclusivity can expose you to penalties, even if the buyer is at fault.

A contract review can help you understand your obligations and avoid any unintended breaches.

Payment terms and security

Payment terms determine how and when you will be paid. You should review:

• Payment timeframes
• Price adjustment mechanisms
• How and when price changes occur
• Your rights in the event of insolvency or non-payment

If you have been affected by recent delayed payments by Frestine Dairy Australia, or any other supply issue regarding payments, it is important to understand your rights immediately. Early advice can help you protect your income, we can help, contact us today.

What to do if you have been affected by supply issues

If you have experienced some supply disruptions, whether related to the Frestine Dairy situation or not, these are the practical steps you can take to protect your business:

Document everything

Keep a detailed record of the below. If a dispute arises, this documentation will be essential in demonstrating that the buyer has breached the contract.

• Missed or delayed pickups
• Changes in volume or pricing
• Payment delays
• Communications with the buyer

Review the terms in your contract

Understanding your rights now gives you options on how to proceed to reduce your ongoing risk. If you are unsure on how to interpret your contract, our agribusiness lawyers can help assess your position and identify risks. A contract review can also help you determine whether you can switch suppliers, negotiate changes or take action to recover unpaid amounts.

Seek legal advice now

If you are experiencing disruptions, do not wait until the situation worsens. Early advice can help you:

• Understand your rights
• Protect your income
• Avoid breaching your obligations
• Make informed decisions about your next steps

Our farming and agribusiness team is here to help you navigate supply issues and protect your business.

We are here to help by supporting Victorian farmers

At Maddens Lawyers, we work closely with farmers across South West Victoria. We understand the commercial realities of farming, with our own Managing Partner part of a farming family. Our team combines legal expertise with practical and local knowledge, allowing us to provide tailored and effective advice.

If you need urgent help with supplier or contract issues, or simply want to review your obligations to ensure that you are compliant, contact Maddens Lawyers today. Our farming and agribusiness team is ready to support you and help you safeguard your business during uncertain times.