Dairy

Dairy farmers join arms in hope of better milk price

By Country News

A group of northern Victoria dairy farmers are taking matters into their own hands and approaching processors with a collective pool of milk, in a bid to obtain a more sustainable milk price.

The farmers are extremely concerned about their business, the industry and the future of the small country towns and communities in which they live.

They believe the industry is fast approaching breaking point.

To date the group — comprising about 20 dairy farmers — has 80million litres of milk and wants to hear from anyone else interested in jumping on board.

The group’s members are serious about the plan and are committed to achieving an outcome.

One of the organisers, Steve Hawken from Bamawm, said irrespective of herd size, the only requirement was the milk must be premium quality.

‘‘Dairy farmers have been at the bottom of the food chain for too long now,’’ Mr Hawken said.

‘‘It’s time we recognised that we are important and without us producing the raw product, there is no processor, no industry and no future.

‘‘Simply, we need a sustainable milk price.’’

To date the group has approached a couple of processors and will be speaking to others.

‘‘The dairy industry really needs to pull together,’’ Mr Hawken said.

‘‘There is no-one representing us with a true farmer’s voice.

‘‘A sustainable price allows our business and industry to grow and will ensure we have another generation of farmers coming along.

‘‘The average age of an Australian dairy farmer is in their 60s — and that’s frightening and dangerous.’’

The group of farmers, who met in Kyabram last week, said the rising and unpredictable cost of water was adding an enormous cost to producing milk in northern Victoria.

Twenty years ago water wasn’t even considered an expense; in 2018 they estimate it is at least 10 per cent of an average farmer’s core cost. Diesel, power, rates and insurance are increasing yearly, while the milk price continues to lag behind.

In many cases rural businesses are being forced into carrying huge amounts of debt as farmers struggle to pay their bills or stop spending altogether.

Kyabram realtor John Lilford was a fifth-generation dairy farmer and said his boys would not be taking over the family farm.

He volunteers at the local St Vincent De Paul and said there was now a number of dairy farmers looking for help.

‘‘Many are struggling and looking for food vouchers, especially the younger generation with high debt,’’ Mr Lilford said.

‘‘Farmers are normally the last people to ask for help — and so many are now struggling financially and mentally.’’

Kyabram’s Dean Kendrick entered the industry five years ago.

‘‘As an industry we can’t continue to keep wearing increasing costs,’’ he said.

‘‘Everything comes back on us and when the milk price doesn’t cover these costs the future certainly doesn’t look too bright.’’

According to a recent Dairy Australia report, milk production in the Goulburn Murray Irrigation District has fallen by a quarter since 2006 to 1.74billion litres, resulting in a shortfall of milk and processors scrambling for supply.

An ACCC inquiry into the dairy industry released in April found there were significant imbalances in every level of the dairy supply chain, from retailers to dairy processors and processors to farmers.

The inquiry found even if processors were to receive higher wholesale prices from sales to supermarkets, this didn’t mean processors necessarily passed it on to farmers.

The ACCC said a farmer’s ability to capture their appropriate share of profits would, as in all industries, depend on their bargaining power, but most dairy farmers have little, and limited scope to reposition their business. It also found neither the existing provisions of the Competition and Consumer Act 2010, nor a voluntary code of conduct, sufficiently addressed these market failures.

The group’s members feel the only thing they have left to vote with is their milk pool — and they are determined to send it to the processor who will pay the most sustainable price.

They are urging any interested farmers to get in contact with the following farmers: Dean Kendrick on 0427 055 513 (Kyabram); Dan Hoch on 0432 955 693 (Echuca); Steve Hawken on 0427 575 204 or Marshall Jacobs on 0438 865 322 (Bamawm); or Dehne Vinnicombe on 0429 366 354 (Calivil).