While dairy farmers across Queensland continue to work on fixing the damage from last year’s natural disasters, the impacts of a man-made disaster in the form of the supermarket retail milk price war are continuing to undermine the viability of Queensland farmers.

This is a key message that presented at a dairy industry breakfast today, June 14.
Speaking at the annual Northern Dairy Industry Situation and Outlook business breakfast forum, industry experts highlighted the results of an extensive Australia-wide survey that also examined data on a region-by-region basis.

Speakers revealed that while milk production in Queensland was slowly recovering – farmgate prices in Queensland had not, with many farmers suffering a cut in farm gate prices this year and the result has been confidence was at a low ebb.

QDO President Brian Tessmann said that leading up to this breakfast, QDO had also surveyed farmers across Queensland in May.

He said the results of these surveys fully showed that farm confidence had taken a major hit due to the impacts of the milk war, which had placed extreme pressure on the rest of the value chain and has led to cuts in farm gate prices.

“With these cuts many farmers in Queensland will make a loss this year. Since the supermarket price war started Queensland has lost over 40 dairy farmers. This needs to stop,” Mr Tessmann said.

“This is despite the northern industry having several positives in its favour, including a growing local market, driven by population growth.

“Nation-wide there is significant regional variation in operating conditions between producers supplying the domestic market in States such as Queensland and southern producers who predominantly supply the export market.

“These findings show the northern industry is in need of some decisive pricing stimulus as well as continuing good seasons if we are to see any lasting restoration of production levels and much needed investment in our industry.

“QDO has for some time pointed out that the domestic market does not respond satisfactorily to supply and demand pressure and so in the face of this market failure, we believe the whole milk supply chain needs to be encompassed by a mandatory code of conduct to ensure fairness in the value chain from major supermarkets, to processors, right down to farm gate.”

Mr Tessmann said the issue needed urgent attention and action from the Federal Government. “This is having a serious impact on farmers today, and in the future will also impact consumers by eroding the ability of Queensland to supply fresh milk for itself. This includes the introduction of an ombudsman to tackle unfair practices in the value chain, and a code of conduct. We need action on this issue now.”