NEWS of a major milk deal between supermarket giant Woolworths and processing company Parmalat has failed to ease the pressure on Queensland’s dairy farmers.
The 10-year deal will see Parmalat supply fresh milk to the Select milk brand but Christmas Creek dairy farmer Peter Brown says the deal is worthless to producers if it comes without a rise to current farmgate prices.
“It’s a great idea for these companies to be making long term contracts but it’s no good having them in place if there’s no rise in price,” Mr Brown said.
The 65-year-old has been working on the family property,
Migunburri, for most of his life and has seen the highs and lows of an industry which he says, is crumbling under the weight of poor returns and increasing grain prices.
“We milk 250 head of Friesian cows each day using a 20 a-side rapid exit system that produces around 2 million litres of milk per year, for which we’re averaging 53c a litre.
“People don’t understand that the farmgate price has dropped but the price of grain is steadily rising and we’re struggling to break even.”
Mr Brown is currently receiving 5c/L extra from Parmalat as a drought assistance payment but said the $400/tonne he paid for barley and maize far outweighed any extra financial support.
“These are the highest prices we’ve ever paid in my lifetime and it doesn’t look like abating until we get a crop in the ground.
“There’s not a lot of confidence in the industry at the moment and the market is driving the prices and we’ve got a shortage of milk, so we’re not seeing that much-needed price rise. It’s a distorted market and it doesn’t bode well for the future.”
Working alongside his son James, Mr Brown said the future not only looked bleak for the industry but for his family property.
“We will keep dairying and if it becomes any worse, we’ll have to seriously look at an alternative because we’re supplying a corrupted market that’s not reflecting the supply and demand.
“The larger companies seem to be able to continue doing what they are doing with selling cheap milk and the government doesn’t seem to want to take them on and make them act in a fair way – we don’t seem to have any power at all.”
Mr Brown said the 5c/L from Parmalat was simply a “band-aid” and dairy farmers were worth more.
“We need another five cents on top of that and we need it to be consistent.”
Kate Stark
Queensland Country Life's markets editor.
Queensland Country Life's markets editor.
