Local dairy farmer Robert Miller has brought into sharp focus the plight of dairy farmers everywhere. It’s not just the drought they’re battling but the crippling farm-gate prices they are getting for their milk.
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As Robert explains, the high cost of feed caused by the drought means it’s cheaper for him to buy milk from the supermarket to feed his calves than to produce it himself.
Certainly, the perilous situation in which he now finds himself has been made worse by the price he gets for his product.
In an increasing number of cases, the prices received are less than what it costs farmers to produce milk. The break-even point was passed some time ago.
Keeping the farm-gate price down is the ongoing milk war price between the major supermarket chains, which saw the cost of a litre of milk drop from $1.50 to $1 and stay there.
Despite the Australian Competition and Consumer Commission’s report into the dairy industry, released in May, saying retail prices did not affect farm-gate prices, Robert is adamant they do.
He says if the milk processor’s profits are eroded as they compete with cheaper home brand products, the farm-gate price they offer will remain low.
As Robert sees it, the supermarket chains have farmers’ futures in their hands by virtue of the price at which they are prepared to sell milk.
The supermarkets, like politicians across the country, have tapped into the strong vein of sympathy for our farmers, launching appeals to help farmers. However, more is needed than photo opportunities and public relations campaigns.
It makes no sense that milk prices have remained static through this crisis.
As Robert Miller points out, when Cyclone Yasi devastated Queensland’s banana industry, prices went up.
Gilmore MP Ann Sudmalis has written to the supermarket chains urging them to raise milk prices and use the extra money they make to help farmers. She was alerted to the farm-gate issue two years ago but it has taken the drought for her to put pen to paper. Like politicians everywhere, she has joined the clarion call but mercifully has spared us the new Akubra and RM Williams.
Farmers tell us a 20 cent per litre increase at the farm gate would enable farmers to ride this drought out, cushioning the effect of runaway feed prices – not too much to ask surely.
