BERRY dairy farmer Rob McIntosh is refusing to let his son Douglas come home to work on the farm as the supermarket giants continue their milk discounting war.
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“He wants to come home to work on the farm, but I’m not encouraging him to do that until we see how all this pans out,” Mr McIntosh said yesterday.
“I can’t expect him to come here and work for pittance.”
One of many dairy farmers facing an uncertain future because of the milk price wars, Mr McIntosh said discounting by the supermarkets could have a similar impact to dairy industry deregulation in 2000, when the number of local dairy farms fell from 350 to 90 in just a few years.
At that stage the call was to “get bigger or get out” and Mr McIntosh said that might again be the fate faced by local farmers.
He said it was inevitable farmers would have to accept less for their milk if Coles and Woolworths continued selling milk at $1 a litre.
“At the end of the day we’re price takers rather than price makers, we’ve had to accept that reality since deregulation,” Mr McIntosh said.
“It’s looking more and more like this discounting is going to be a permanent arrangement, and that’s going to mean significant changes to dairying in this area.”
That included farmers having to increase the size of their operations to cut down the price of milk production per litre.
Brundee farmer Tracey Russell said farmers were facing a lot of uncertainty amid growing fears about farm-gate prices being slashed.
“Our hands are tied behind our back, we just have to take it,” she said.
“They haven’t cut the milk price to us yet, but if everyone is buying the cheaper milk the supermarkets might soon be saying to the brands they don’t need our products on the shelves because no one’s buying it.”
She feared the brands might disappear, meaning there could be no milk in corner stores.
South Coast Dairy chairman Paul Timbs was confident that would not happen, and felt his company would survive regardless of what the supermarket giants did.
“We don’t market at the cheaper end of the marketplace,” he said.
“We’ve got a superior product.”
Mr Timbs said South Coast Dairy might have to revamp its marketing to focus on its quality, appealing to consumers in much the same way more people were buying free-range eggs.
South Coast Dairy’s Berry site manager, Graham Abbott, stressed the quality difference between his company’s product and what was being offered for $1 a litre in supermarkets.
“Most supermarket-brand milks contain a percentage of permeate [a by-product of bulk milk processing that’s often described as watered down milk], and they don’t have to label that unless it is more than 10 per cent,” he explained.
“So people see a bottle on the shelf that’s significantly cheaper and appears no different to a local version, but the fact is it’s often quite different and just not labelled that way.”