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ACCC findings aside, $1/L milk a big issue

DO BETTER: Dairy farmer Ross McInnes said supermarket milk wars definitely had an effect on the Queensland dairy industry despite the ACCC finding otherwise in its recent inquiry.
DO BETTER: Dairy farmer Ross McInnes said supermarket milk wars definitely had an effect on the Queensland dairy industry despite the ACCC finding otherwise in its recent inquiry. Claudia Baxter

ROSS McInnes reckons if the ACCC doesn't believe $1 a litre milk is a problem, then it would be interesting to see what would happen if processors set all their milk products to that price.

The Harrisville farmer is vice-president of the Queensland Dairyfarmers' Organisation and said he was quite certain all re-investment in the industry would grind to a halt very fast and processors would be going out of business faster than the dairy farmers that supplied them.

His comments were in response to the findings of the recent Australian Competition and Consumer Commission inquiry into the country's struggling dairy industry.

One of the main findings was that cheap milk wasn't one of the bigger problems facing the industry, but Mr McInnes said it didn't take much heavy thinking to work out that it was very much an issue depending where you stood.

Mr McInnes said he could understand that creating recommendations on a national scale wasn't the easiest of tasks and that certainly there were producers suffering minimal effects from the supermarket price wars, but that didn't mean it wasn't a national problem.

And speaking from a Queensland perspective, the lower prices set by organisations in smaller and more densely populated areas like Victoria were simply unsustainable in a region where milk couldn't possibly be produced on the same scale or transported to a processor as cheaply.

He said it would be no great surprise if a Tasmanian farmer had $1 per litre milk pretty far down his priority list, but it would be foolish to believe that market pricing set by large processors and supermarkets wouldn't have a national effect.

"The acid test would be, if anyone believes it doesn't make any difference, to sell it all for a dollar and see if you get the same product,” he said.

"See if the processors continue to re-invest.”

Mr McInnes said every time a Queensland dairy farmer went out of business, it was the equivalent of about two Brisbane suburbs that would then be getting milk from further afield, so it was important to get the balance right on a sustainable industry.

He said overall dairy farmers were supportive of many of the recommendations, particularly making an industry code of conduct mandatory, but it was disappointing it hadn't gone further to address issues that seem to be keeping farmgate prices depressed.

"We support what they have recommended, but we just wish they had gone further to get to the real root of the problem,” Mr McInnes said.

Topics:  accc dairy inquiry dairy industry dollar milk milk prices


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