About two thirds of Scenic Rim dairy farmers will receive some reprieve through Woolworths’ end to $1 a litre milk, in what has been described as a ‘good start’ to helping the ailing dairy industry.
Harrisville dairy farmer Ross McInnes, who is the Queensland Dairyfarmers’ Organisation (QDO) Scenic Rim State Councillor, said Woolworths’ move was symbolic in ‘breaking the nexus’ of $1 a litre milk but would not solve the industry’s woes.
Woolworths stopped selling $1 a litre fresh milk on 19 February.
It now sells two and three litre varieties of supermarket-branded milk for $2.20 and $3.30 respectively, with the increase in revenue going to farmers.
Some reprieve for Parmalat farmers
Mr McInnes said Woolworths’ decision meant about $2 million would be recouped across the 40 local dairy farms which supply Parmalat, which Woolworths uses in its supermarket-branded milk.
Mr McInnes said while an estimated $50,000 return to each Parmalat farmer sounded like a lot, it would barely scratch the surface.
“The feed bills are going up and people are flat out paying those let alone doing the investment on-farm that they should be doing,” he said.
“To put it in context, the average farm supplying milk that goes into Woolworths might be better off by 5 cents per litre.
“The grain bill on that average farm in the last 18 months has increased by $30,000 let alone any other feed costs.
“The increase in electricity used for irrigation at night has gone up 335 per cent in the last 10 years – some of those costs are just out of control.
“So those people are behind the 8-ball and they have been the last couple of years, and $50,000 will allow them to tread water and nothing else.
“We applaud it – it’s a good start – but that’s all it is. It’s a start.”
Hope for flow-on effects
Mr McInnes said he hoped non-Parmalat dairy farms in the Scenic Rim would see increases through higher competition among processors.
“I supply Dairy Farmers and we won’t see any increase out of this, but in July when our prices are renegotiated we have to receive a competitive price for the region. If Parmalat farms are getting a few cents a litre higher than us, then one way or another we have to get a higher price too,” he said.
“We certainly hope it’ll push the farmgate price up across all processors.”
Mr McInnes said he hoped Norco farmers, who supply the milk for Coles-branded bottles, would get the same reprieve provided to Parmalat farmers.
However following Woolworths’ announcement, Coles CEO Steven Cain told media ‘cost of living’ pressures on customers were behind the company’s decision to leave milk at $1 a litre.
“One thing I can’t do as CEO of Coles is disadvantage our customers at a time when clearly they’re under household budget strain,” Mr Cain told media.
“We’ve been one of the main supporters of farmers, we’ve distributed nearly $16 million so far, but it’s important that we don’t disadvantage Coles customers.”
$1 a litre milk ‘unsustainable’
Mr McInnes said $1 a litre milk had robbed the dairy industry of its capacity to reinvest.
“I don’t think anyone realises the extent to which $1 a litre milk has hurt the dairy supply chain, because it’s taken so much money out which should’ve been spent on re-investment in the industry,” he said.
“You’ve got to have money to actually invest – you’re stuck and it’s a real catch 22.”
Norco dairy farmer Kay Tommerup, who is a QDO District Council Member for the Scenic Rim, said something had to give.
“We were getting paid more for our milk 20 years ago. Our costs have gone through the roof for everything we buy, but it seems to be milk which gets kept at an unrealistically low price,” she said.
“$1 a litre milk cannot continue. If it continues, there is no dairy industry. It’s as simple as that.”
Scenic Rim Mayor Greg Christensen said $1 a litre milk threatened farmers’ livelihoods.
“Everyone from paddock to plate – or from farm to fridge in the case of milk – is under pressure – that’s a given,” he said.
“But the reality is that keeping the price down for the consumer is squeezing the life out of the other end of the supply chain. If that goes on for too long, there will be nothing left in the fridge.
“At present our farmers are the ones who feel the squeeze, and it is not an overstatement to say that when they are gone the fridge will be bare. This is crisis not just for our community – this is a crisis for Australia.”
Helping build resilience
The Scenic Rim Regional Council and Regionality Pty Ltd will host the ‘Resilience Through Diversification’ Agriculture Industry Workshop at Kerry Memorial Hall on 14 March.
Presenters will include Ross Hopper from Maleny Dairies, Rose Wright from Regionality, Damien O’Sullivan from the Department of Agriculture and Fisheries, Brian Coe from the Queensland Rural and Industry Development Authority and Planning and Economic Development Officers from the Scenic Rim Regional Council.
The event will go from 9.30am to 2pm and a BBQ lunch will be provided.
RSVP to Cameron Thomas by 11 March on 07 5540 5474 or Cameron.email@example.com