Farmers, families feeling pinch on milk prices

Australian dairy leaders have warned locally-produced milk is under threat as soaring costs and falling prices force farmers to leave the industry.

NSW Farmers Dairy Committee acting chair Malcolm Holm said “a perfect storm” of events was making it harder and harder to be a dairy farmer every year, with a drop in prices from processors coinciding with high costs, competition for land, and a lack of confidence in the industry.

“The family dairy business is becoming harder and harder to manage and consumers are being forced to choose between our great locally-made dairy products or the imported ones as a result of the declining milk volumes,” Mr Holm said.

“We’ve got this horrible situation where the supply is shrinking and rather than prices that support farmers we’ve got signs the processors will drop their prices, which will lead to less Australian milk in supermarkets.

“If we learned anything from COVID it’s that we can’t rely on imports for our food security, we need to shore up supply locally!”

Processors are required to release their opening milk prices each year before 2pm on June 1 under the mandatory Dairy Code of Conduct, which came into effect following an ACCC inquiry into farmgate milk prices. Victorian processor Bulla was first out of the gate this year announcing prices of $8.80 to $9.60 per kilogram of milk solids, below what many in the industry said would be needed to stop the declining number of farmers.

Mr Holm said farmers had little option but to accept the prices offered by local processors, and while no-one wanted to see the price of milk rise in the supermarkets, failure to support the industry would lead to a downturn.

“It’s a tough situation for farmers and families at the moment – we don’t want to see the price of milk rise in the supermarkets, but at the same time we don’t want to be driven out of business,” he said.

“There are a lot of costs in the supply chain that are contributing to milk prices, and we’re getting squeezed on either end.

“Recent federal budget announcements of rises in heavy vehicle road charges and increased biosecurity levies will further squeeze the whole market.”

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