Time for whole of Dairy Supply Chain to get a fair go
Several years ago, QDO attempted to gain traction with a fair go logo for Queensland dairy farmers. Although very well intentioned, the program was not able to get off the ground. However, the underlying issue that the fair go program aimed to address has not gone away. That is the sustainability of dairy farmers is still at risk and there is substantial contraction of the industry across the country as a result.
How do we stop the contraction of the dairy industry? The whole dairy supply chain must be profitable and sustainable for the contraction to end. This includes dairy farmers in all states of Australia, dairy processors throughout Australia and the companies that transport milk from farms to processing facilities and then onto retail and export destinations. The whole of the dairy supply chain throughout Australia must get a fair go or the contraction and job losses will continue across the country on farm, in factories and in transport companies.
The Australian dairy industry lost 300ML in 2021/22 and is on track to lose 630ML in 2022/23. But we have some retailers and processors saying the price paid to farmers and processors should go down because the world price has gone down? This makes little sense in Australia where production has slid so far that we have gone from a major dairy exporting country to a net importer of dairy products.
Surely if there is a major shortage of milk the lowest valued uses included low valued exports will cease and the milk will continue to move to higher valued domestic uses? And surely the retail price of dairy products, including fresh milk products where almost 40% of Australia’s milk production is used for, must go up substantially?
Alternatively, the price can stay low, the industry will continue to contract and imports will increase further. And the imports are often from countries who subsidise their production, use drugs that are illegal to use in Australia and do not adhere to animal welfare standards applied in Australia. Is that really what consumers and retailers want?
Eric Danzi, Co-CEO eastAUSmilk