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low milk prices will destroy australian farmers

The Australian dairy industry is at risk of imploding unless farmers can be guaranteed a price above their cost of production, says JOHN CARTWRIGHT, president of the Australian Milk Producers Association.

As the suppliers of milk to the Australian public, we are working long hours every day, regardless of weather, so that our fellow aussies and the world can enjoy the highest quality dairy products.

Unlike our fellow aussies though, we can be expected to produce our milk with no idea what we will be paid for it. We can be expected to produce it for less than the cost of production, with no allowance made for our labour! And even opening prices can’t be relied on any more, with our budgets blown as money is snatched away with as little as a days notice! Would our fellow aussies cop that? We think not.

Yet dairy farmers are expected to! And cop it from all angles. When wages or fuel goes up, we wear everyone’s increases but can’t pass them on. We pay levies with no say in their expenditure and for what benefit? During tough times, our supposed leaders and peak bodies hold talkfests to tell us we are resilient, we must face this new challenge, we must become more efficient. Well, we’ve been there, done that. Costs have been cut and belts tightened so much we can barely breath! But what of everyone post farmgate?

With milk prices announced for 09/10, the reality of what we were expecting has emerged. The full impact of a deregulated market with no price support is out for all to see and mainly brought about by the export market sector that was not long ago touted by our leaders as the future of our industry.

As farmers analyse the new seasons figures, we are finding they are far from a sustainable price. Hardest hit will be those still in drought, those lacking water and younger farmers with significant debt levels. Also feeling the pinch will be farmers, buoyed by higher returns of a year ago with the promise of some above average years, who invested heavily in expanding their businesses with costly capital acquisitions and works. Many are saying these prices won’t cover fodder bills and debt will be unserviceable.

We believe large numbers of farms will close, unable to cope with the situation. There will be much stress and anxiety within families, the social breakdown will be terrible and children will be sadly exposed to the household trying to deal with the heart wrenching decisions that will have to be made. Our service providers will be another casualty as farmers have no funds for purchases, repairs or to pay accounts.

If significant numbers of farmers exit the industry then that must impact upon processing plants with losses of milk, leading to rationalization and further costs of transporting milk around the country, further reducing returns to farmers.

We cannot just sit and watch this happen. The Australian Milk Producers Association (AMPA) believes that we need government assistance and we need it quickly. We are calling for a deficiency payment support or a floor price to be put in place. American farmers have such a scheme for these times and we should be able to implement similar.

Of course it would require total support of all in our industry and the challenge is getting everyone on board. Farmers need to say that enough is enough, to everyone post farmgate. We deserve better. We work hard and need to reap some rewards for our efforts. Surely demanding a price that at least covers our cost of production with a bit left over to sustain our families is a fair and reasonable request.

The height of madness is expecting the same people to do the same thing and get a different outcome. We are told the long term future looks bright. This will only happen if big changes are made now. More of the same is not an option. Enough is enough.

Tags: milk, price

Replies to This Discussion

Permalink Reply by Rowell Walton on July 16, 2009 at 12:01pm

John, this is a real good article, where was it published and what exposure has it had, I thought the dergulation had been a good thing mate this sound like it may have been a bit damaging. rowell walton...

Permalink Reply by John Cartwright on July 16, 2009 at 5:54pm

Rowell, this has been published in the vic. paper "weekly times" as a opinion piece.
Received some very favourable comments.
As for deregulation of our industry there was no one more opposed to it than myself.
It has been a disaster for many. In the states of nsw,qld and wa around half the farmers have left the industry.
Victoria is feeling the effects right now and it is not a pretty thing.
Will be the same hardship for them as to the other states earlier.
will be more comments as we move into the spring months when most down south will be trying to exist on 20 cents a litre when it it widely accepted that the cost of production is at least 35-40
john cartwright

Permalink Reply by Rob Moore on July 20, 2009 at 6:45pm

John, I,m in SW QLD- wool beef and lately lamb- have our own little group here. see R&L Moore Pastoral, your welcome to join if it is of any int. Also the ABA of which I am a director in has a new group we are setting up. Looking on as an observer I have always felt that the dairyfarners have had the roughest deal out of all the primary Inds ,so would like to support in any moves for justice.
Regards Rob Moore.

Permalink Reply by John Cartwright on July 20, 2009 at 8:01pm

Hi Rob,
Welcome your comments, and would welcome support for I fear greatly for our industry and what these low prices are going to do.
Still having said that this is what I said when opposing deregulation back in 2000.
I do know a few from ABA and it interesting that nearly all farm industry now have breakaway organisations to represent so many producers.
I believe most of the troubles in all producers has been such poor leadership from the so called "peak bodies" who in my mind are no more than puppets for the government of the day.
Hope through the dairy group to keep all informed of the state of the industry
rgs john

Permalink Reply by Deborah Willis on July 21, 2009 at 12:18am

Hi John,

I remember you during the Dereg days, I was with the DFA then!. You came to Taree and spoke at one of the processor meetings. We really did get a raw deal from Government in 2000. Last year was the final year I paid income tax on that package!!! eight years later...and we know how it worked!! A taxable package!!.

Looking forward to your comments in the group.

Regards Deborah

Permalink Reply by Rowell Walton on July 25, 2009 at 12:23pm

John, reckon this is a great place to meet, would be great if you could get some more of your people on to this site for debate and support..rw

Permalink Reply by John Cartwright on July 25, 2009 at 7:59pm

Rowell, It sure is a place for good discussion in all the groups.
Working on more members adding to the discussion but I think they are a bit shy yet.
This is all new to most of them, but give them time.

Permalink Reply by Anita Messenger on August 31, 2009 at 2:46am

Yes, the independent dairy farmers are MEANT to be pushed out of business - this whole global attempt to take over our food production/sales MUST get rid of all of us who are INDEPENDENT private property owners so the food is only produced/processed/sold by certain mega-agri corporate entities. Read Agenda 21 for starters on the U.N. website. Control the food, control the people. The animal id has nothing to do with animal disease or food safety, only taking control of private property - your real estate along with your animals. Your REAL WEALTH. The dairy farmers were taken over long ago and are going down. In America, we have HUGE corporate dairies who are supplying most of the milk for the whole country now. This is the goal. Government involvement will only bring the downfall quicker - it's MEANT to! We need the governments to GET OUT of our private businesses. Our American independent truckers are being taken down, too - and I have a brother-in-law who owned his own truckes for decades who finally had to let it all go and get a *job* with the government. He'll tell you what I'm saying about the trucking industry is true and so will our son who drove for a huge corporate trucking company. It's not just the dairy industries - it's ALL privately owned independent properties and businesses. Please see the big picture with all of this. In America, for the last four years we were warning that the rest of our food/gardens/plants/etc. would be next. Sure enough, since January we've been battling one federal "food safety" bill after another that not only has the NAIS embedded in them but also taking a sweeping control of our very kitchens, not just our gardens/seeds! One of them got through our House before the summer break and is now in the Senate - we MUST stop it! Called a food safety bill. Voters have been telling the government what they must do to make our food safe (regulate the PROCESSORS like they are being PAID to do! and STOP LETTING STUFF THROUGH OUR BORDERS - like they are being PAID to do! In other words, USDA DO THE JOB WE ARE PAYING YOU TO DO!) but they are refusing to listen to us. There are forces at work larger than our individual countries' governments, folks - start educating yourselves and start educating every single other person you can.

As for the dairies, once the milk is in critical supply from one dairy after another going down and prices in the store are going up, the consumers will start screaming and the governments will step in to save the day - with government-run/owned dairies - just like with our banks and car manufacturers just had happen here. The independent dairies here are already pretty much government run/owned with the owners just owning the debt, taxes, liabilities, etc. Our crop farmers are facing the same situation - we are losing farmers every week and more of our food is being produced by less people/companies than ever.

The dairy owners in both America and Australia are going to have to understand that they need to come together and take back their property and their product - for one thing, you are missing a huge market for people who want raw milk straight from the dairy (like we used to be able to get!). There is no excuse with today's technology to have milk that has a problem - tests are available for about every disease you would want to worry about including TB. A healthy animal CANNOT give you a disease. Clean milking is the other key and there is no excuse for not doing that today. There is no reason that people should not be able to get clean healthy raw milk from a local producer - and that's where the MONEY is. The CONSUMERS have got to be educated on what is really happening and get them to rise up and demand that their "representatives" in the government do what the PEOPLE WANT done. Get the consumers behind you, dairymen! And all the rest, too, before you go down the same path as the dairies.

Permalink Reply by Julie White on October 22, 2009 at 1:30pm

John
I am in the chain - As I am a Franchisee selling milk to general route customers.

Please read my submission to the Dairy and Milk senate enquiry

http://www.aph.gov.au/senate/committee/economics_ctte/dairy_industr...

I can rally the Franchisees.....as long as EVERYONE sticks together, we should be able to get some type of result. However the hard yards come in convincing everyone that we can take on the big processors - AND WIN !!!!

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