9 hours ago
Farmers struggle with milk price
Annie Guest: Australian dairy farmers have suffered drought and floods this year, but they say the price of milk is an added challenge. While the price offered to dairy producers by the processing companies is higher than last year, farmers say it's not enough to make a living. Luke Radford reports.
Luke Radford: Dairy farming is a tough gig. There's long hours, early mornings, and you can't really just take a week off.
Bridget Goulding: We milk twice a day, 365 days of the year, so you don't get a break from it.
Luke Radford: That's Bridget Goulding from Kattunga in northern Victoria. Like many farmers, she lives and breathes her job, despite the challenges. But in recent years, the price she's getting for that hard work isn't enough.
Bridget Goulding: The problem though that is happening is that it's the costs that are really affecting the farming businesses. Everything has gone up in price and as dairy farmers, we can't just go, we need more.
Luke Radford: Dairy farmers sell their milk to processors who turn it into things like drinking milk or cheese. These include brands you may recognise like Bega or Norco. But there are also large multinational companies involved, like Fonterra from New Zealand, Saputo from Canada, and Lactalis from France. Every year, these processors have to announce their base price by the 1st of June, which they then can't go below. But when the price came out in May this year, farmers were shocked to discover it had barely increased. Robert Brokenshire is President of the South Australian Dairy Farmers Association.
Robert Brokenshire: Some of the processors have worked really hard to get the best possible price for farmers and other processors we're very disappointed with because we were hoping that they would all come in with at least $9 a kilogram milk solids opening offer. But for quite a lot, particularly some of the bigger multinationals, they came in at prices from about $8.60 to $8.80. And unfortunately, that's not a sustainable and viable price for dairy farmers.
Luke Radford: That price of $8.60 per kilogram milk solids is an industry term. It's used instead of price per litre because the raw milk is used for many different products like cheese, yogurt or even protein powder. It translates to somewhere between 75 and 80 cents per litre paid to the farmer. Robert Brokenshire says that number needs to be between 90 cents and a dollar and he fears the fallout if it isn't.
Robert Brokenshire: If the milk price is not there to be viable, notwithstanding that we love our cows and in many of our cases we've been breeding them for generations, the fact is that those of us in the high rainfall area with irrigation could turn to horticulture, vegetables and other diverse agricultural products. That would have an impact on the consumer because there'd be less milk production, more demand for that and probably would put an increase on the price in the supermarket.
Luke Radford: So given the days of the dollar per litre milk at the supermarket are now long gone, why are those higher prices not trickling down to farmers? There are many factors at play but it's mostly because of the international market. Matt Dalgleish is a market analyst and director of
Matt Dalgleish: When it comes to the setting of the price, the domestic processes have to weigh up of course how that supply situation is situated. They've got to be very careful about what they offer because they are very much subject to that international market. They have to be competitive in that international market and when they're thinking of products that they're trying to sell into the domestic market, because we do have a significant amount of imports coming in of various different types of products, some of those imported products can be quite competitive too.
Luke Radford: Whatever the cause, dairy farmers say if they don't start getting paid more for their milk, there could be less of their product on Australian shelves in the future.
Annie Guest: Luke Radford reporting.
