Contract Milking Agreement tips

Time to prepare contract milking agreements.

At this time of year, many contract milkers have made, or are in the process of making, the decision as to whether they remain on the farm they are currently on, or whether they relocate for the next season.

This means that a number of farm owners and contract milkers will soon be entering into Contract Milking Agreements.

At Gallie Miles we see a number of disputes arise each year in relation to the terms of these agreements.

With that in mind, here are our top tips for both farm owners and contract milkers who are considering whether to enter into a Contract Milking Agreement (CMA):

1. Many farm owners use the Federated Farmers New Zealand Contract Milking Agreement. This is a comprehensive agreement. If you are presented, or intend to use, another form of agreement, ensure that it covers everything and that you get advice if you do not understand any of its terms.

2. Ensure that you have named the parties to the CMA correctly. If a company or trust owns the farm, ensure that the company or trust name is correct and identified as the farm owner.

3. Ensure that the description of the land in the CMA encompasses all blocks of land that the contract milker will work on.

4. When providing warranties as to past production, check the Fonterra figures to ensure that these are correctly recorded in the CMA. A failure to do this may amount to a breach of warranty and entitle the contract milker to make a claim against the farm owner.

5. Ensure that the annual estimated production is realistic. While there are many factors that influence the production that can be achieved in a season, if an estimate is entirely unrealistic and without proper basis, the contract milker may make a claim against the farm owner for misrepresentation.

6. If you are contract milker, inspect the farm thoroughly, including all blocks, races, water supply, and cow sheds, before you enter into the CMA. If you have any queries, ensure these are raised with the farm owner before signing.

7. If you are a farm owner, ensure you comply with the minimum and maximum cow numbers you have recorded in the CMA.

8. Once the CMA is signed, check that you have fulfilled all of your obligations under the CMA prior to the season getting underway. For farm owners this includes providing the contract milker with copies of the farm health and safety policy, a plan of the farm, records of soil tests, water use records and any resource consents or conditions.