FREESTONE dairy farmers Alan and Alison Payne believe their valley has gone against a state-wide trend with more dairies operating now than 20 years ago.
"We started dairying here in the early 1990s and since then five or six others have started up and two or three dairying families have gone out," Mr Payne said.
"But overall there are more dairy farms in our valley now, than when we started.
What works in our favour is we are shareholders in Norco, which is a co-operative run by farmers, who still have a hands-on role in the industry.
"It's a completely different story in other valleys around here and across the state and I am not entirely sure what makes Freestone different."
The farmer's comments reflected the latest State Government AgTrends report, which confirmed 50 dairy farmers have left the Queensland industry since the supermarket price war started.
The report showed a significant drop in dairy farmers' confidence, driven by low returns, which were a direct outcome of the ongoing cheap milk price pressure.
According to the report Queensland milk production had now fallen below consumer demand.
The report also predicted another 40 dairy farmers could abandon the industry in 2013 if the supermarket price pressure continued to negatively impact on incomes.
Out Freestone way Mr Payne has no explanation for the increase in dairy farming numbers. However he does believe limited farm size - his block like many of his neighbours is just 200ha - makes dairying one of few financially appealing options.
"It's a living, but you don't get rich on it," he said. "Most of the time it pays the bills."
He agrees the supermarket price war, which has seen milk retail for $1/litre for more than a year, has had a detrimental impact on Southern Downs dairy farmers.
"It has definitely had an effect, because of supermarket prices, processors have reduced what they will pay suppliers," Mr Payne explained.
"What works in our favour is we are shareholders in Norco, which is a co-operative run by farmers, who still have a hands-on role in the industry."
The Paynes are currently locked into a year-long supply contract with their milk purchased at an average 52c/litre.
They describe the price as "just covering costs".
"The reality is there are very few dairy farmers left in Queensland and unless something drastic happens I can't see much of a future in it," Mr Payne said. Queensland Dairyfarmers' Organisation president Brian Tessmann said the AgTrends report should be a wake-up call to consumers and government.
"The supermarket milk war is creating a real threat to Queensland's milk supply," Mr Tessmann said. "The impacts are devastating and we are losing farmers we should not be losing, including progressive young farmers."
Mr Tessmann said the AgTrends report indicated 50% of dairy farmers were unsure they would be in the industry in five years.
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