By Brian Tessmann, QDO President
Normally the Christmas and New Year period is a period of reflection on the year that has passed and the year to come. It is often for many too, a time of rest and a little indulgence as we give and receive gifts to our friends and family.
This year however, milk and dairy producer Parmalat, makers of the popular Queensland dairy brand ‘Pauls’, is planning on slashing its price it pays to dairy farmers suppliers for its milk. In an action that would fail to satisfy even the Grinch’s definition of ‘Christmas cheer’, Parmalat is looking to lower its farm gate price 1.6 cents per litre. This could mean as much as $16,000 could be slashed from an average farmers revenue. While these negotiations are usually concluded between Parmalat and the Premium collective bargaining group this year likely to go to arbitration for the first time.
This means that the current 190 Parmalat suppliers in Queensland, just under half of all farmers in the state, could be facing a significant undercut to their balance sheets. This move looks cynical when all other Queensland processors, both major and minor, have maintained or raised farm gate prices for their dairy farmer suppliers.
It is difficult to reconcile Parmalat’s claim that the recent surge in branded milk sales from the ‘I Buy Branded Milk’ campaign has not directly benefited its bottom line. It is almost as if Parmalat has rode the wave of public support for its branded product under the guise of supporting local farmers, only to dump its hard working farmers when it came time to share the profits. Any reduction in prices paid to farmers sends a confusing message to consumers that might impact on brand loyalty at the checkout.
On a lighter note, I would like to wish all QDO members a happy and holy Christmas. Take the time to thank your local dairy farmers for supplying the dairy we all enjoy this time of year.
What QDO wants for Christmas is for no farm gate milk price drops in the New Year.