QDO Open Letter to Waleed Aly

Dear Mr. Waleed Aly,         

I wanted to thank you for your interest and public comments on the dairy crisis that has engulfed our industry in the last few months. It would be fair to credit too, your extensive segment on “The Project” in pushing dairy back into the consciousness of our city cousins.

I must commend you on the quality and accuracy of your segment, a sentiment commented on many times in conversations I have had with others in the dairy industry.

The Australian dairy industry has a very complicated story with different production systems and markets that it contends with. For example, many dairies in the southern states are nearly fully exposed to the export market, but for us in Queensland, we are fully exposed to retail discounting.

It is accurate to say that your high profile and well-articulated dairy exposé generated a high level of social consciousnessand set a tone of discussion the reverberated in the media, the coffee shops and throughout social media for months. 

Since the nationwide dairy rallies, consumers support for branded sales of fresh white milk materially consolidated. Within supermarkets, branded sales went from 34% in April to a high of 49% in June and settling at 46% for all of July. Political interest in the dairy industry has also intensified since that time and we may be finally entering a time when we see some equity for small businesses.

Unfortunately in Australia, we have a situation where consumers are repeatedly told they can have cheap food without being provided with an explanation on the repercussions of this. It may be a cliché, but the corporate sector is great at providing the spin and are all too willing to expect our producers to provide the sweat and the grunt behind their shiny ‘cheap cheap’ facade.

The sad fact is that milk is being sold for the same price as 25 years ago. The price of retail cheese is in an even more ridiculous position. Unfortunately, dairy is not alone in this and most primary food producers are being herded into the one situation.

Aside from the management issues with Murray Goulburn, the long term sustainability of dairy farmers is dependent on a functional market. That functionality cannot be achieved while retailers have such a parasitic attitude to suppliers.

Removing the requirement for processors to tender for supermarket contracts on a rise and fall clause basis at least allows a domestic premium to apply when export prices are at their lowest. Sadly this is not the case at the moment where retailer’s margins on discount milk in Victoria is equal to or greater than some producers.

Waleed, thank you. It is one thing to do a piece and then move on, but your genuine compassion for this subject touched a chord with the wider public which others have not been able to do.

Thank you and warm regards

Ross McInnes     

Vice President Queensland Dairyfarmers Organisation

On behalf of Queensland dairy farmers