Checkout milk price key factor
Posted on Friday, March 08, 2019 - Category: In the News
The dairy industry has been crippled by the debilitating effects of $1-a-litre milk for more than eight years.
But now Woolworths has raised the price of its $1 per litre milk to $1.10, with the extra 10 cents to go, in full, directly back to farmers, there is for the first time hope that we can beat this destructive pricing strategy.
This is a major victory and Woolworths should be congratulated for making the difficult, but right decision to ensure farmers get a fairer return for their tireless work.
However, while we may regard this as a step in the right direction, it is certainly not the end of the battle against discount dairy.
Other supermarkets have so far refused to follow Woolworths’ lead. Coles has proposed a government mandated industry-wide levy, while Aldi has so far rejected all calls to raise the price of its discount milk line, which retails for 99 cents-a-litre.
This sends a negative message to our farmers about the worth of their work and their product – especially when the major retailers have just raised the price of bread due to high grain prices.
Coles, without a mechanism to ensure an increase in the discount milk price would go directly to farmers, has instead offered to collect donations at their checkouts.
This suggestion is just another slap to their suppliers. Any suggestion by Coles that they can rattle the collection tin for struggling farmers shows how out of touch they are. Farmers don’t want a handout. They run businesses and like all business owners, farmers want a fair price for their product.
Farmers are currently suffering through a severe drought, with production costs skyrocketing due to high grain, hay and water prices.
Supermarkets cannot continue selling cheap milk while simultaneously raising the price of other products to help drought-stricken farmers.
The last Dairy Australia National Dairy Farmer Survey, conducted in 2018, found farmer confidence in the future of the dairy industry has dropped from 75 to 47 per cent over the past four years.
Removing $1 milk will help restore farmers’ financial confidence, and also boost confidence in regional communities and small businesses.
Farming families put tireless effort and resources into producing a quality product, day in and day out, and to see it devalued to the consumer has a deep and lasting impact.
Most shoppers are aware of how difficult the past few years have been for the dairy industry. We have been heartened by the outpouring of support from all Australians, wanting to know which brands they can buy to support farmers.
The latest Dairy Australia Situation and Outlook report attributed a trend of declining farm profitability to soaring productions costs combined with relatively steady milk prices.
Dairy Australia is forecasting national milk production in 2018/19 will fall below 9 billion litres for the first time since the mid-1990s, in another blow to industry confidence.
It is clear something must change to reverse this trend of decline, and the retailers have an opportunity to come to the table and help us implement a solution.
If more farmers leave because their milk price doesn’t reflect their high production costs, there will be a real danger of Australia soon not having a dairy industry.
- David Inall, Australian Dairy Farmers CEO