DESPITE weak export markets being blamed for milk price cuts in Victoria and South Australia, Scenic Rim dairy producers believe $1 milk is their biggest issue.
Most of the milk produced on the Scenic Rim is sold domestically, either as Woolworths home brand or branded milk.
Dairy producer and Premium Milk board member Paul Roderick said when Murray Goulburn signed a contract to supply Coles with $1 milk for 10 years it decreased the value of milk right across Australia.
“Supermarkets don’t engage in regional pricing up or down they want to have the same price across the country,” he said.
The cost of production for dairy products in Victoria and South Australia, on average, is lower than the cost of production in Queensland.
Mr Roderick said with the winter based rainfall in the southern states was a better environment growing pastures like rye grass which meant they did not have to buy as much feed.
He said supermarkets needed to take some responsibility for setting milk prices.
“Supermarkets have come out in the last couple days and said we don’t set the price and that’s true but they influence it greatly,” he said.
“They said their milk is only some small percentage of the total of Australian milk supply but when you set the bottom price for a particular product than everyone else has to follow that lead.”
Mr Roderick said it made it hard for processors to push up margins on branded milk labels because it would become too expensive for shoppers.
“It just devalues the whole market,” he said.
Murray Goulburn produces export and domestic milk, prompting some people to argue that it bases Australian supermarket milk prices on export values.
There have been calls for the government to set a minimum price for processors to pay producers, which have been backed by Greens leader and farmer Richard Di Natale.
Wright MP Scott Buchholz said putting a minimum on milk prices would lead to inefficiencies and would be a step back from industry deregulation.
“If you ask if that has worked as a state, I believe we generate more milk today than we did years ago with less farmers,” he said.
Mr Buchholz said the best way to support Scenic Rim dairy producers was to pay a bit extra and buy branded milk.
“No one wants to see our local dairy farmers go out of business and the dairy farmers are united in their opposition $1 milk, labeling it as the single issue crippling their industry,” he said.
