Dollar milk price war: ‘Our milk is worth less than the rain that falls from the heavens’

The Cochrane family has erected a huge sign on one of its properties along the Prince Highway between Berry and Bomaderry, which urges people to boycott Coles, claiming the supermarket is “driving farmers broke”. 

Geoff Cochrane’s three sons all work on dairy farms across the Shoalhaven, and each is struggling with the supermarket’s low milk prices. 

“My family have been dairying on the South Coast for seven generations,” he said. 

“I’ve got eight young grandchildren who are budding young farmers, but by the way things are looking, they may not be farmers.” 

Mr Cochrane claimed Coles was the catalyst for the cheap milk price war. 

“They started this dollar a litre milk eight years ago, and they are continuing to devalue our product,” he said. 

“Our milk is less worth less than the rain that falls from the heavens.” 

READ MORE: Farmer welcomes 10-cent drought levy on milk

While Coles has committed to increasing the price of its own brand three-litre milk from $3 to $3.30, with the 10c per litre to be donated back to drought-affected farmers, Mr Cochrane said it was nothing but a publicity stunt.

“Putting a 10c levy on just three litre milk will not solve any of the problems, it’s a publicity stunt to make the public think they’re doing something good for farmers,” he said. “It’s just a drop in the bucket.” 

Mr Cochrane described the levy as a form of charity, which he said was not the answer to struggling farmers’ prayers. 

“Two dairy farms on the South Coast stopped operating this year and I think that’s a very sad reflection on supermarkets that people can’t continue anymore due to low milk prices.” 

All of NSW is currently in drought, which has caused an increase in production costs for dairy farmers. While we are all hoping for the drought to break, Mr Cochrane said it would take some time for farmers to feel any kind of relief. 

“Even if the drought were to break, our high input costs would continue for at last another year because there’s no grain crop,” he said. 

Mr Cochrane said his family’s milk was at its lowest value in 11 years.

“We need a fair price to get out of this low milk price rut,” he said.

“If Coles want to keep driving their prices ‘down down’, they’re going to drive not just their dairy farmers, but all their farmers out of business.” 

Mr Cochrane said while the levy was a good theory, it would be worthwhile if it were added to all dairy products. 

Labor candidate for Gilmore Fiona Phillips, who comes from a dairy farming family, said dollar a litre milk was “morally and ethically wrong”. 

“I’m opposed to it full stop,” she said. 

“You should not be selling something for less than it costs to produce because it creates the public perception that’s what it’s worth.” 

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Ms Phillips said while the 10c levy was good idea, it would not support farmers into the future. 

“The big supermarket CEOs are getting paid millions and the poor dairy farmers are getting squeezed,” she said. 

In line with the ACCC’s Dairy Inquiry’s recommendation for a dairy farming mandatory code of conduct, Ms Phillips said farmgate prices needed to increase. 

“Dairy farmers need more bargaining power to help lift the farmgate milk price,” she said. 

“Until they get that increase, things won’t improve. So far our government has done nothing to assist our farmers increase milk prices, and I’m calling on them to implement this code.” 

Despite continued claims dollar a litre milk is having a negative impact on the dairy industry, the ACCC stated in its report that “processors set their own farmgate prices independent of the supermarkets’ retail prices.”

“For this reason, changes to the retail price of private label milk are unlikely to result in any changes to the farmgate milk price received by farmers, because processor profits on private label milk are not influenced by whether farmgate prices are high or low."

Coles did not provide comment. ​