WHEN you pick up a bottle of cheap milk, the chances are the profits are being sent overseas — because they are certainly not going into the pockets of Australian farmers.
Half of the major milk brands are owned by overseas companies, sending profits to Italy, France and Japan.
Dairy Farmers and Dairy Choice are both supplied by Lion, which is owned by Japanese company Kirin.
A2 Milk is publicly listed, which means it is owned by a variety of Australian and international shareholders.
Of the rest, Coles milk in NSW comes from farmer cooperatives Murray Goulburn and Norco. Norco sells its own milk, while Farmers Own is from farmers who made their own deal with Woolworths.
Where does your brand of milk come from?
Coles has also launched a new milk brand, which will be on sale soon and deliver an extra 20c from each litre to help farmers.
“$1 milk is the lowest common denominator, far less than we ever thought and now it’s a base price consumers expect rather than a temporary market solution to get people in the door,” NSW Farmers’ dairy chair Robert McIntosh said. “When a bottle of water costs more than milk you know something is wrong.”
Norco, the nation’s oldest Australian-owned dairy cooperative, has also struck a deal with Coles to supply the Coles brand of milk in northern NSW, which has enabled Norco to pay an extra 3.5c a litre to farmers.
“Farmers have done it hard for a long time and the only way to be sustainable is to create enough profit remunerations. We are paying the highest farm gate prices to our farmers in Australia,” Norco CEO Brett Kelly said.
Agriculture Minister Barnaby Joyce has committed to hosting a symposium of dairy industry representatives, including farmers, processors and retailers, after the election to discuss industry-led proposals to strengthen the national dairy industry.
“If the supermarkets don’t come to the table it will force me to find other places to sell product to. They say I won’t but there is heaps of interest from China,” Mr Joyce said.
He also recently announced the Coalition would provide support, including $555 million in concessional loans for dairy farmers.
Dairy farmers such as Taree’s Murray Polson say something needs to be done.
When his great-great grandfather first started dairying, he milked about 30 cows, there were no industry regulations and milk was delivered by boat.
Fast-forward four generations and, while they no longer transport milk by boat, Murray and his wife Jane are struggling to stay afloat.
“Our industry is operating on a knife edge, these cuts and the $1 milk price wars are the worst crisis our industry has faced,” Mrs Polson said.
The Polsons supply Australia’s largest processor, Murray Goulburn, which last month slashed its milk price to about 35c per litre, well below the cost of production.
Not all farmers get paid the same and it depends on who they supply but it costs farmers about 45c a litre to produce milk.
And they are expecting further cuts later this month when the new “farm gate” price is set.
“Farmers are already on the brink of leaving their farms over the $1 milk price war, now we’ve been hit with the price cuts — who knows what will happen,” Mrs Polson said.
“The supermarkets need to put their money where their mouth is and, when they say support Aussie farmers, they need to actually support us and increase the $1 milk to make it sustainable.’’