Milk Price Issue 'May Threaten Quality'

AUSTRALIA - Government must look at curbing the profits supermarkets make out of milk at the expense of dairy farmers, a parliamentary committee has heard.
calendar icon 12 October 2009
clock icon 2 minute read

Australia's dairy industry will shrink and milk quality will fall if the price offered continues to be below the cost of production, New South Wales dairy farmer Sid Clarke told the Senate's select committee on agricultural and related industries in Canberra reports The Age.

Mr Clarke, from Ladysmith near Wagga Wagga, who sells his product to Fonterra, says issues such as milk quality and shrinkage of the market will ruin the industry unless problems with pricing are dealt with.

Mr Clarke said: "The Government has got to curb the amount of profits that supermarkets drain out of the system."

He stressed that farmers weren't in a cooperative situation to demand suppliers pay them higher prices for the milk they produce and couldn't demand a fairer share of the "housewife's dollar".

"We need to try to get government intervention ... there should be some sort of recognition of the effort farmers put into producing a product. And certainly the price shouldn't be below the cost of production," he told The Age.

Mr Clarke higlighted concerns for industry standards suggeting that producers may not be concerned with welfare or hygeine if they do not receive fair prices.

Tasmanian milk supplier Symon Jones said he currently sold his milk to New Zealand dairy giant Fonterra for $3.67 a kilo of milk solids. Mr Jones said Fonterra has been paying 40 to 50 per cent less for milk this year and becuase of that his business stood to lose AU$121,000. If the price was increased to $5 per kilo, then Mr Jones said his business would make a profit of $40,000 this year.

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