The Queensland dairy industry is in “free fall” according to its leaders and it has nothing to do with the latest floods that have devasted the sunshine state.
Queensland Dairyfarmers Organisation president Brian Tessmann said he feared Australia would become a “net importer of dairy product” soon, based on declines in production due to drought as well as cheap domestic sales such as $1 a litre milk.
He labelled the Woolworths decision, last month, to scrap $1 a litre house-brand milk and deliver 10 cents a litre directly to farmer suppliers as a “good first step”. This would push prices to “easily high fifties (cents a litre) at least”, according to Mr Tessmann.
“Out of the drought levy, farmers are getting about 3 cents a litre and this (scrapping the $1 a litre) could double that to 6 cents a litre,” Mr Tessmann said.
“It currently wouldn’t compensate for the drought, but if it’s a permanent thing it would help with the drought and possibly hold guys in (the industry) and after the drought it could help them expand.
“We are in free fall, so we need to step the free-fall because if we keep going (this way) it is clear we will become a net importer of dairy products.”
Mr Tessmann said Queensland had about 350 dairy farmers, down “well-over” 250 since the introduction of $1 a litre house-brand milk into supermarkets eight years ago.
Severe floods ravaged parts of Queensland last month, reportedly killing hundreds and thousands of livestock. Mr Tessmann said the local dairy industry wasn’t “severely impacted” by the floods.
Drought continues to hurt the Queensland dairy industry and Mr Tessmann quoted barley at $430 and said feed was being sourced from as far away as South Australia’s Eyre Peninsula and Western Australia.
Last month, Ross McInnes was milking 350 and about to start calving again at his Harrisville farm, an hour south-west of Brisbane. It’s been really dry, and he believed stocks of hay wouldl disappear in the coming six weeks if there was no significant rainfall.
“We are only treading water the moment, putting hay in the shed and then feeding a bit out,” Mf McInnes said.
Queensland production was down 10 per cent year-to-date in December last year, according to Dairy Australia figures. Last season Queensland produced 399 million litres. Australian production, to December last year, was down 5.1 per cent year-to-date.
According to Dairy Australia figures, in 2017–18 Australia’s gross dairy exports were 30 to 40 per cent of its total milk production. Subtracting imports, the net export figure was about 20 per cent of total milk production.