Woolworths will remove $1 per litre fresh milk from sale from Tuesday, February 19, a move applauded by farming advocacy groups.
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Tim Cochrane, who along with his brothers Tom and Dan, operate farms at Terara, Pyree and Wogamia, supplying milk to Parmalat and ultimately Woolworths, welcomed the move.
“This is great news and something we have been pushing for for seven years,” he said.
“It is good our suppliers have decided to end the $1 a litre milk.
“It will hopefully mean more money coming back onto farms, lowering some of our running costs.”
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The Cochrane family erected a sign condemning Coles and its $1 milk on its Princes Highway property at Meroo Meadow last September.
Ironically that sign was to be changed today with signs “Thanking Woolworths” for its drought relief.
“We organised two weeks ago for that sign to be changed,” Mr Cochrane said. “It is supposed to go up this afternoon [Monday].
“It was just our way to say thank you to Woolworths for its drought support and their decision to continue that support for another six months, where Coles has dropped it.”
That drought support was based on the volume of milk provided to Parmalat, with a minimum safety net of $1000 for smaller farmers.
Mr Cochrane said he hopes Woolworths’ move would actually lead to other supermarkets including Aldi and IGA to follow suit.
“Some IGAs had already done it, adding 10 cents a litre, the one at Milton did, bit some others haven’t,” he said.
He said not all Parmalat suppliers [of which there are 270 farms] goes in to the Woolworths home branded milk.
“Only a percentage of our milk goes into Woolworths’ milk, there are still a number of other Parmalat products and branded milk,” he said.
It will definitely make life a bit easier on the farm where our costs keep blowing out. The cost of hay and grain over the past 12 months has doubled.
- Terara Dairy farmer Tim Cochrane
“Hopefully this can also put the pressure on the price of branded milk as well and farmers get a bigger percentage of that return as well.”
He said the extra return would certainly be welcomed.
“It will definitely make life a bit easier on the farm where our costs keep blowing out,” he said.
“The cost of hay and grain over the past 12 months has doubled.
“Last year a truck load of hay was costing us around $5500, this year it’s closer to $12,000.
“Grain has been similar, doubling in price, but the increase has been slower - we are getting grain now from Western Australia at about $485 a load including GST.”
And while locally farmers have experienced an “exceptional” summer corn growing season, Mr Cochrane said conditions were starting to turn.
Last year a truck load of hay was costing us around $5500, this year it’s closer to $12,000.
- Terara dairy farmer Tim Cochrane
“While it has been dry, it has been a great corn growing season - the season looked good but in the past two weeks it’s turned,” he said.
“The long range forecast is for a dry winter. I know a lot of guys are trying to get their corn off now but we could do with around 100mm of rain.
“It’s that dry they’d still be able to get their corn off.
“So this extra money from Woolworths will certainly come in handy.”
NSW Farmers’ Dairy Committee chairperson Erika Chesworth said the decision was “a huge win for dairy farmers”.
“We and all dairy farmers have been fighting for this result since $1 a litre milk was introduced in 2011,” she said.
“Woolworths have shown real leadership with their decision to end the sale of $1 a litre milk. This is a lesson for every other retailer in the country. Woolworths have done this the right way. They engaged with dairy farmers when we raised our concerns. This decision shows that they have listened and taken decisive action”
In a joint statement with Woolworths, Australian Dairy Farmers chief executive officer David Inall said: “There is no doubt that this is a game changer in the fight against discount dairy that has long frustrated the industry.
“It is reassuring that Woolworths has committed to deliver the full 10 cent increase back to those farmers who supplied the milk into that product category.
“Removing $1 milk is not just intended to restore farmers’ financial confidence, but it will also boost confidence in regional communities and small businesses that rely on the industry.”
From Tuesday Woolworths will sell two and three litre varieties of home branded fresh milk for $2.20 and $3.30 respectively. Every cent of the increase will end up with Australian dairy farmers.
It follows the success of the Drought Relief Milk range on the eastern seaboard, where it has delivered $5.8 million in relief to more than 285 dairy farmers since September 2018.
As the price change goes national, it will deliver higher milk prices to more than 450 Australian dairy farmers supplying into Woolworths branded fresh milk.
Woolworths Group CEO Brad Banducci said: “We believe the long term sustainability of our dairy industry - and the regional communities they help support - is incredibly important for Australia.
“In our consultation with industry bodies, including the Australian Dairy Farmers Association, its state members and NSW Dairy Connect, we’ve heard the outlook will continue to be extremely tough for dairy farmers right across the country.
“This is affecting milk production and farm viability, which is devastating for farmers and the regional communities in which they live. It’s clear something needs to change and we want to play a constructive role in making this happen.
“The Drought Relief Milk payment model has worked on the eastern seaboard and is the most effective way to guarantee price increases end up in the pockets of Australian dairy farmers.
“While we’re realistic this won’t solve broader structural issues, we hope it will help inject much needed confidence into the sector and the regional communities dairy farmers do so much to support."
Milton dairy farmer Robert Miller brought the plight of dairy farmers to national attention last year when he launched a campaign against discount milk.