Dairy farmers still struggling

STEPHANIE VANICEKBusselton Dunsborough Times

Coles' decision to slash fresh food prices has come as no surprise to dairy farmers in the region who say they are struggling to keep farms going a year after the milk price wars.

This comes despite a Senate inquiry concluding in November last year that the price cuts had not hurt Australia’s dairy industry.

“The price wars definitely had an impact,” WAFarmers dairy section president Peter Evans said.

“You can’t take that much money out of the industry without the processors or the farmers paying.”

Mr Evans said farmgate prices in WA had remained unchanged in the past year while prices in south-eastern Australia were increasing.

He attributed higher prices to the region’s export market, while WA remained reliant on “drinking milk” production.

“Milk prices in WA were unreasonable to start with, and now we have the lowest prices in Australia,” Mr Evans said.

WAFarmers Vasse Zone president and Acton Park dairy farmer Greg Chapman said farmers could not afford to continue producing milk at today’s prices.

He said an 8 per cent reduction in WA milk production in the past year could be attributed in part to the pricing wars.

A recent announcement by Harvey Fresh to provide incentives for producing more milk was met with little support, Mr Chapman said.

“Harvey (Fresh) can’t lift their farmgate prices because it’s already been benchmarked (by the major supermarkets) at the low price,” he said.

Both Mr Evans and Mr Chapmansaid farmers were beginning to downsize as a result of low farmgate prices, with many selling cattle to help with their cashflow.

Yoongarillup dairy farmer Nikki Slee said while the family farm was “still in the game”, they had had to sell their beef cattle to help with the bills.

She said she had little hope of the supermarkets raising their prices.

“They will continue to cut prices because they are winning, and they are doing it at a cost to Australian farmers,” Miss Slee said.

Forrest MP Nola Marino said she held concerns about the long-term iability of the industry should prices remain stagnant.

“We are still awaiting the carbon tax to come in and the margins are already quite finite,” she said.

Get the latest news from thewest.com.au in your inbox.

Sign up for our emails