ON one hand Berry dairy farmer Rob McIntosh was delighted with Woolworths’ announcement of the end of $1 a litre milk - on the other he was disappointed.
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Mr McIntosh operates Woodside Park just north of Berry, supplying milk for Coles.
The supermarket giant has said it will not be removing the $1 a litre milk from its shelves.
In a statement Coles said it knows many customers in Australia face cost of living pressures and doesn’t want them to be disadvantaged through price increases.
“Coles has been exploring additional options in relation to how to best support Australia’s hard working farmers, including how we ensure that drought assistance initiatives are as efficient and effective as possible. At the moment, there are a variety of different models being adopted by retailers and producers,” the statement said.
“Coles is committed to finding a better model that can be adopted by the industry to assist Australian farmers, and intends to liaise with relevant parties including government and the ACCC.”
Speaking on ABC Late News, Mr McIntosh said he was “honestly really disappointed Coles hadn’t seen fit to stand up with Woolworths and see the removal of the dollar a litre milk”.
“Lots of farmers who supply the Coles contract would be disappointed like I am,” he said.
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“But saying that I’m very thankful at least one retailer in Woolworths has chosen to stop the cycle of discounted dollar a litre milk.
“That’s great news for a lot of dairy farmers and I can’t help but feel happy for them. I just wish I was one of them.”
Woolworths’ decision will benefit around 10 per cent of dairy farmers.
Lots of farmers who supply the Coles contract would be disappointed like I am. But saying that I’m very thankful at least one retailer in Woolworths has chosen to stop the cycle of discounted dollar a lite milk. That’s great news for a lot of dairy farmers and I can’t help but feel happy for them. I just wish I was one of them.
- Berry dairy farmer Rob McIntosh
“It appears the 10 cents a litre will go straight back to farmers, my understanding it will work through the processor sector,” he said.
“For farmers that’s a huge boost in a time where most farmers, I would think all farmers, have gone into greater debt in the last 12 months with drought conditions and the increased price of production.
“The 10 cent increase would take some farmers to better than 55 or 60 cents a litre, meaning there is a buffer to move forward with feed, fertiliser and being able to put back into the farm and to get something out of it. We can also look after the cattle a little bit better.”
He said there had been a 15 to 20 per cent reduction in milk production across the state and most of that had been due to the sale of cows across NSW in the past 12 months.
“Stocks of cattle and the potential for milk production has certainly been depleted,” he said.
Discounted milk price has devalued the real value of milk. It’s a fresh product that can support life. It’s a sustainable everyday product. We know it is a great healthy option, but we find it cheaper than water.
- Berry dairy farmer Rob McIntosh
He said the effect of the drought, even on the often lush South Coast had been “severe”.
“We have suffered with the drier season,” he said. “We haven’t been able to make as much store feed as we would usually.
“We rely on our concentrate grain and extra hay from out west and that has doubled in price and we are happy to wear that for at least another 12 to 18 months.
“In our case we have borrowed to offset that. We have a fair way to go to right the ship.”
Mr McIntosh said the heavily discounted milk price had had an effect on the industry.
“It’s devalued the real value of milk,” he said.
“It’s a fresh product that can support life. It’s a sustainable everyday product. We know it is a great healthy option, but we find it cheaper than water.
Many customers in Australia face cost of living pressures and doesn’t want them to be disadvantaged through price increases. Coles has been exploring additional options in how to best support Australia’s hard working farmers, including how we ensure that drought assistance initiatives are as efficient and effective as possible. Coles is committed to finding a better model that can be adopted by the industry to assist Australian farmers, and intends to liaise with relevant parties including government and the ACCC.
- Coles
“It has also diluted the confidence of farmers. It’s gone on for eight years - we are quite aware of the fact supermarkets have been using regularly as a loss litre in comparison to other products because it is fresh, it won’t last long on shelves.
“We’re very proud of the fact it’s fresh and local but the real problem for us is being able to sustain that for much longer into the future.”
Coles says it is passionate about supporting farmers and producers and in the past six months has committed $16 million to support the industry.
“This includes contributing around $4 million to almost 640 dairy farmers through the Coles Dairy Drought Relief Fund and more than $7 million in partnership with the Country Women’s Association, resulting in over 2300 additional grants for drought-affected farmers,” the statement said.
“Coles will continue to collecting customer donations at our supermarket registers nationally from Monday, February 25, until further notice and will match these donations dollar for dollar.
“We also note that the ACCC has previously examined the Australian dairy industry and concluded that house brand milk pricing does not negatively impact farmgate milk prices.
“Coles is seeking a long-term solution that does not disadvantage our customers and supports our dairy farmers.”