Dairies sweat over prices
MORE than 190 dairy farmers in Queensland fear they could lose up to $3 million if a major milk processor drops the price it pays to farmers.
Parmalat, which produces the brand Pauls, was not able to reach a pay agreement with its suppliers from the collective bargaining group Premium before the 2016 contract ended on December 31, and the dispute has been sent to arbitration.
President of the Queensland Dairyfarmers Organisation said dairy farmers across the state were hoping for no price drop, and "sweating over it”.
"This could mean as much as $16,000 could be slashed from an average farmer's revenue,” Mr Tessman said.
"This means that the current 190 Parmalat suppliers in Queensland, just under half of all farmers in the state, could be facing a significant undercut to their balance sheets.
The conflict comes six months after Murray Goulburn slashed dairy prices to $4.31, despite the cost of production for a kilogram of milk solids ranging between $5.00 and $5.50.
Mr Tessman said Parmalat's dispute contradicted
the fair practices of other
milk manufacturers in the state.
"This move looks cynical when all other Queensland processors, both major and minor, have maintained or raised farm gate prices for their dairy farmer suppliers,” he said.
"It is difficult to reconcile Parmalat's claim that the recent surge in branded milk sales from the 'I Buy Branded Milk' campaign has not directly benefited its bottom line.”
dairy industry is almost entirely domestic focused, with over 95% of milk produced in Queensland sold as fresh white milk in Queensland.
"It is almost as if Parmalat has rode the wave of public support for its branded product under the guise of supporting local farmers, only to dump its hard-working farmers when it came time to share the profits,” he said.
More than half of the state's dairy farmers are waiting on the outcome of the current negotiations.
This is the first time the group and Parmalat have gone to arbitration in 10 years of negotiating.
"Our industry will continue its calls for fairer and more sustainable domestic milk and dairy market,” Mr Tessman said.
The group of dairy farmers expect the pay dispute to be resolved by March.