As Australians tuck into delicious locally produced lamb this Australia Day, the country’s dairy farmers face a third straight year of low farmgate and retail milk prices.
On Australia Day 2011, Coles initiated its controversial $1 per litre milk price campaign. Since that day, dairy farmers across the nation, including in Western Australia, have found the going tough with low farmgate prices making profitability more difficult and forcing many to leave the industry.
Western Australian Farmers Federation (Inc.) (WAFarmers) Dairy Section President, Phil Depiazzi, said since the introduction of $1 per litre milk, the dairy industry had failed to see any increase in milk sales apart from the expected growth to match population.
“Coles management trumpeted that milk sales would increase, however considering that Australia’s population increased by 1.6 per cent, a one per cent increase in sales is hardly surprising and nor should it be greeted with fanfare,” Mr Depiazzi said.
“Coles need to justify their pricing campaign to the dairy farmers of the nation. It’s built around high sales and simply the sales have not eventuated, and it is hurting local producers and forcing dairy farmers out of the industry.
“They claim to be helping Australian families, when in fact Coles’ “Down Down” campaign is destroying dairy farmers, small retailers and jeopardising Australian’s ability to purchase locally produced milk in the future.
“In the first five months of this financial year, Western Australia’s milk supply is 1.2 million litres down on the corresponding time in 2011/12 and 13.6 per cent down on 2010/11.
“There is an urgent need to reinstate value back into milk, to ensure processors, producers and retailers can extract enough out of the supply chain to remain viable.”
In a report released in December, it was found that dairy farmers needed at least 50 per cents per litre and above to be able to reinvest in their dairy business, and since then input costs have risen.
“We need co-operation between retailers and processors to ensure fair value is extracted from the market place to ensure farmers receive a viable farmgate price,” he said.
“The Western Australian dairy industry has the capacity and potential to play an important role in world food security in the future, however urgent and immediate action is required if the industry is to survive and make a valuable contribution to the State’s wealth in the future,” Mr Depiazzi concluded.
WAFarmers urges consumers to purchase locally branded milk and dairy products to support the state’s dairy producers.