WILLOWVALE farmer Rod McLennan estimates his milk income has reduced 20% due to the recent floods, wet weather and the milk price war between the supermarket giants.

Dairy farmers all around Australia have noticed a drop in their February pay cheques and the Queensland Dairyfarmer's Organisation has linked the drop to the decision by Coles and Woolworths to reduce milk to $1 a litre.

While he can't do anything about the weather, Mr McLennan wants more action from governments and the Australian Competition and Consumer Commission (ACCC) on predatory pricing.

“I question whether what they are doing is legal,” Mr McLennan said.

“The ACCC hasn't a good track record protecting consumers.”

His wife Vanessa doesn't blame consumers for choosing milk at $1 a litre in the supermarket.

“What would you do in that situation?” she said.

Mr McLennan said while the price to consumers was lower than normal at the moment, he believed if the big supermarkets put the small shops out of business and there was less competition, consumers would pay more in the long term.

“The ACCC has to take a long-term view,” he said.

Third-generation dairy farmers, Rod and Vanessa McLennan bought the family farm in 1991, a purchase made at the start of the drought.

“It was tough in the drought and now our cheques are back 20% in the past two months,” he said.

“Media reports suggest that the supermarkets are losing millions chasing market share.

“Cutting the price of milk is just a shopper's bait to get people into the shop and make a profit out of them (on their total purchases).”

He also believes the Federal Government has to look after the interests of farmers in the current milk price war.

As for the future, he hopes the milk processors are clever enough not to get into discounting when negotiating future contracts with big supermarkets.

Son Kris started working full-time on the farm in 2009. While Mr McLennan is delighted to have his eldest son on the farm, he said he wouldn't want any of the children to feel obliged to take over the farm.

“It is a tough industry,” he said.

Junabee dairy farmer Jean Hoffman is also concerned about the impact of the milk price war on the dairy industry.

“I fear the industry is in dire straits and believe the price war will see the end of branded milk,” Mrs Hoffman said.

She has about 400 head of cattle on her family-owned Junabee farm and said the profits of dairy farmers were restricted by the big companies.

“We're not running our own business – we're running it for the multi-nationals and we're just the ants,” she said.

Mrs Hoffman said producers had no say in how much their products were worth and had to accept whatever amount was put forward by the processing company.

“We are not in control of our own industry,” Mrs Hoffman said.

Each year she watches the number of people battling on in the industry dwindle, as they opt for more stable and viable work.

“It's a losing battle at this stage,” she said.

Mrs Hoffman said getting out of the industry is continually on her mind but making the jump was not an easy thing to do.

“Thoughts of leaving are there all the time; it's not something that goes away,” she said.

“You can't just up and leave. There's a lot invested in a family farm.

“We've done a lot of upgrades and all you do is get into bigger debt because you can't get the money in.”

Mrs Hoffman said she feared this latest move would create a domino effect resulting in no more farmers and no fresh food being produced in Australia.

“If the farmer isn't there producing the milk where are they going to get it from?” she said.

“They say they can get it cheaper by bringing it in from Victoria, but that's a fallacy.”

Mrs Hoffman believed dairy farmers were in a worse position now than they were 10 years ago when the industry was deregulated and said she couldn't understand it.

“The farmer is being railroaded for a reason – who knows what it is,” she said.

“I've been around a long time and I never thought I'd see this.”

Queensland Dairyfarmer's president Brian Tessman said a full breakdown of figures revealed the retail price war was having a direct impact on dairy farmers' income.

He said if the cut-throat discounting continues the impacts will grow.