Government and industry need to work together to address the power imbalance within the dairy industry.
The imbalance between farmers, processors and the supermarket trade is seen as the major factor that is crippling the industry and impacting the future of Australian dairy.
The most recognisable example of the imbalance is the $1 per litre price that the major retailers have set which puts intolerable pressure on the farm-gate price for raw milk paid to dairy farmers.
We all know that $1 per litre is unsustainable. It’s hurting the whole dairy industry and will ultimately hurt consumers’ back pockets. The retailers are using it as a loss-leader to attract shoppers; but at the rate of farm closures in Queensland there will be no fresh milk production by 2028 given the current rate of decline.
Markets in far north Queensland would have no option but to use UHT and consumers in the south east would no longer be able to purchase local milk and would wear the cost of having it freighted up from southern states.
The predicted social and economic impacts throughout Queensland will be significant. More than 3,000 Queensland jobs would be put at risk.
The economic loss to Queensland would amount to approximately $250 million per year at farm-gate, approximately $400 million at factory-gate.
We’ve come a long way since the first investigation into unfair trading practices in the dairy industry, but we still have a lot work to do.
All parties need to take responsibility and ownership for repairing the damage. If the Australian dairy industry is to survive, politicians from all parties in Federal and State Government need to work with us to address the power imbalance.
Queensland dairy processors will be invited to work with QDO to negotiate a minimum farm-gate price for fresh milk that will help ensure a Queensland dairy industry now and in the future. – Brian Tessman, QDO president
