Last week signalled a major victory for Queensland dairy farmers and the Australian dairy industry with Coles and Aldi following Woolworths' lead and declaring an end to $1/L milk. Indeed, it is almost an anticlimax for those who have been battling for the past eight years, that almost overnight, the war on $1/L milk has been won.
$1/L milk has been a loss leader for supermarkets and a headache for processors since its inception. While QDO will continue to monitor all supermarkets and individual stores, we do not believe it is anyone's intention to go back to a fixed base price of $1/L.
Over the past few weeks, we've been asking shoppers whether the increase has affected them or their purchasing behaviour. Unsurprising to us, almost everyone that QDO interviewed were unconcerned by the 10-cent increase. This is not to say that everyone is happy with the result.
Many do not realise that the 10c increase on private label milk represents only a percentage of the amount paid to farmers. It does not mean that farmers are automatically paid an additional 10c for every litre produced.
Whether a farmer will receive an increase at all is dependent on several factors - which processor a farmer is contracted to, what product that farmer's milk goes towards (e.g. fresh white milk, flavoured milk, bulk cheese, powdered milk etc) and whether a processor has a private label milk contract.
While the 10c increase on private label milk will benefit most farmers in Queensland, NSW and WA who supply for the fresh white milk market, most farmers in other states will not see the reward.
We have made inroads into solving the problems of fresh white milk but in order to survive and prosper as a national dairy industry, we must reform the value of the whole of the dairy cabinet. We need to identify products other than white milk which are being undervalued and resolve these problems.
To create real and lasting change, we need to look beyond the traditional supply chain and focus on the consumer. Only by acknowledging and harnessing their influence, can we create a sustainable dairy industry.