WHAT is the future for dairy farmers?
According to fourth generation Kangaroo Valley dairy farmer Robert Cochrane, it’s “pretty bleak” – so bleak he has warned dairy farming in Australia could disappear entirely.
There are 6700 dairy farms in Australia, down from more than 12,000 a decade ago. In 1979-80 there were almost 22,000 farms.
With farmers getting a poor return for their product and being unable to attract young people into the industry, Mr Cochrane said while he would hate to see it, there might come a time when there was no dairy industry.
His observation comes at a time when the Australian Competition and Consumer Commission (ACCC) is investigating complaints that supermarket giants Coles and Woolworths misused their market power by engaging in “unconscionable conduct”.
Mr Cochrane warned that farmers must stay united to try to improve payment for the milk they produce.
“We are going downhill because the processors aren’t paying enough to the farmers and then the supermarket giants Coles and Woolies decided to sell $1 a litre milk,” he said.
“That is having a severe effect on the farming community.
“It is even putting some farmers off the land – not so much in this area but definitely in others.”
One of the major issues for farmers was the payment for milk.
“Milk was paid on a tiered system. farmers were contracted to provide a certain quantity of milk – in the old days it was called quota milk – now known as Tier 1 milk for which they received 45 cents a litre,” Mr Cochrane said.
“There are also incentives depending on the quality of your milk.
“But for any milk in excess of that allocation, called Tier 2 milk, farmers were only receiving 13 cents a litre.
“It costs between 25 and 35 cents a litre to produce, depending on the season and where you are.
“Receiving 13 cents a litre just wasn’t viable.”
He said when this price was announced, a number of farmers culled good excess stock.
“It wasn’t worth feeding cattle and producing milk at 13 cents a litre, so they culled animals and therefore production dropped,” he said.
“The processors want milk to meet demands so they abolished the Tier 2 milk costing until June 30 this year.
“So for the past two months we have received 45 cents a litre for what we are producing.
“But the big question will be what happens after June 30.”
Compared to the 55 cents a litre producers were receiving in 2008-09, it’s a big drop.
“That was a sustainable price and I would like to see that come back,” Mr Cochrane said.
“We are not getting the return on our investment and we can’t attract young people into the industry.
“Why would they want to come into an industry that is going downhill?
“Unfortunately dairy farmers are getting thin on the ground, but a new body has formed called Dairy Connect and they have taken the bit between their teeth and are forging ahead, endeavouring to lift milk prices,” he said.
“Hopefully we can get the message across and the processors can rethink their pricing policies.
“It is important for the farmers to unite and stay together rather than go off in faction groups.
“If the processors and supermarkets don’t pay a higher price for our products, dairy farming could well go out of fashion in Australia, not just here on the South Coast, not just in NSW but Australia-wide.
“If that happens where will they get their milk from?
“If things don’t improve for the farmer I could see a day when we would be importing milk.
“This could mean the death of the white milk industry, fresh milk might go and we could end up with long life milk.”
Robert Cochrane milks 280 cows on 500 acres on the Valley flats with his son Graham.
“Even if we are getting paid 45 cents and the supermarkets sell it for $1, someone is making a lot of money and it’s not us,” he said.
“Back in 1997 when there was first talk of deregulation, I went to a meeting and someone asked about the supermarkets and how would we deal with them.
“The answer was they didn’t think it would be a threat and would deal with it when it came – well it came and hit with a bang.
“It’s terribly disappointing for any young farmers wanting to start out.
“I’m a fourth-generation farmer, my son Graham is a fifth and he has just had a son to make it six generation and, like many of his contemporaries in the area, he wants to keep farming, I just hope there is something left for them.”