Dairies pin hopes on proposed pricing bill
WITH milk prices well below production costs and dairy farmers in Queensland selling out at a rate of one every couple of weeks, government must step in and act now or Queensland will go down the same road as France, which only has UHT milk available to its residents.
That is a view shared by many within the dairy industry and one man who knows just how volatile the situation is, John Saville, of Nobby, fears for the worst months to come.
As a Queensland Dairy Organisation (QDO) state councillor, Mr Saville had just returned from meetings in Brisbane when the Bush Telegraph caught up with him in his family's 283-hectare farm, where they milk 70 cows in a mixed herd.
He believes the price of milk paid to the dairy farmer needs to be at about 85 cents a litre for them to continue.
Currently he is paid 52c a litre under contract to Dairy Farmers Milk Cooperative (DFMC) supplying National Foods.
If Queenslanders want to continue to enjoy fresh milk, they must support the dairy farmer by buying branded milk in the supermarkets or corner stores, rather than cheaper generic milk, according to Mr Saville.
"In reality, a lot of people won't be in the industry down the track," he said.
All these things help but while the $1/litre milk is still on the shelves, there's no viable future for Queensland dairy farmers, as it's inhibiting any chance of growth.
A second-generation dairy farmer, Mr Saville operates his dairy with wife, Margaret, and son, Matthew, a third-generation Saville who has put his faith in the dairy industry.
"My parents, Ron and Jean, bought this farm in the early 1950s, and Mum is still a partner in the family business," he said.
"My dad used to say you can handle a crook government, bad weather and poor prices, one at a time but lately we've been getting all three at once."
Mr Saville believes the dairy industry has been decimated in the past 10 years by deregulation and now the $1/litre milk price war being conducted by large supermarket chains.
"Everyone would be looking for an option and we are one of them," he said.
"I can't see a solution on the horizon, while the $1 per litre milk exists, as it is just eroding the price of our product."
Mr Saville is hopeful that steps are in place to curb the downward spiral the industry is currently experiencing.
"Firstly, we need certain parts of the Trade Practices Act put back with regard to predatory trading to stop the dictatorial antics of the supermarkets," he said.
"Secondly, we (QDO) are working on a mandatory Code of Conduct, specific to the dairy industry, which has to be passed by Parliament.
"If we get those two things, we may have a chance of getting the milk price back up again but we need to curb the power of the supermarkets."
The QDO has welcomed last week's announcement by Member for Dalrymple, Shane Knuth, to introduce a Fair Milk Mark Bill 2013 to State Parliament.
The bill would, among other things, introduce a fair milk mark on a milk bottle that identifies that the farmer was paid a fair price above his or her costs of production.
Currently most Queensland dairy farmers receive prices less than the true cost of production.
According to the QDO, that is why more and more farmers, investment and employment are leaving the industry - and there is a shortage of milk to meet the needs of Queenslanders.
QDO president Brian Tessmann said the QDO welcomed the attention to the issue of the supermarket duopoly, which was still wreaking havoc on the industry.
"All these things help but while the $1/litre milk is still on the shelves, there's no viable future for Queensland dairy farmers, as it's inhibiting any chance of growth," Mr Saville said.
At present, there are only 518 dairy farmers still operating in Queensland, compared to 1640 at deregulation back in 2000.
"At our last QDO state meeting prior to Christmas, there were 540, so we've lost another 22 dairy producers in the past four or five months," Mr Saville said.
"There were five more sales advertised in last week's Queensland Country Life, and they are the ones that are holding sales.
"There is producers going out of the industry that don't have a sale also some just shut up shop," he said.
His son, 26-year-old Matthew, left home for a few years to work on a cotton farm but returned six years ago to dairy with his parents.
When questioned about what he felt his future held on the family farm, he went quiet.
"At the moment there's no future until we stop milking cows," he said.
"I guess it depends if we get a price rise or not.
"But even the prospect for grain and beef producers isn't rosy at present."
Mr Saville is lucky in some respects, as he gains an off-farm income from fixing windmills.
"You don't make $70 an hour dairying that's for sure," he said.
"Ten years ago most dairy farms wouldn't have had anyone working off-farm but now it's the only way to keep going.
"We are still surviving but I don't know when the cut-off will be.
"If the price of milk drops or we get a cut in our allocation, that could be the straw that breaks the camel's back."
Mr Saville remains philosophical though when he talks of the day when there will be no dairy farmers left in Queensland.
"You can send the young ones to university to learn how to milk a cow but they don't have those years of experience on a dairy farm," Mr Saville said.
"That will all be lost when the last dairy farmer sells his cows and it won't be able to be replaced for at least a generation," he said.
"If we sold out and in a year's time they put up the price of milk to $1.10 per litre, my son would say 'why bother'.
"It will take another generation to forget what we have gone through in the dairy industry."