Calls are growing for supermarkets to do more to support the dairy industry after a generic milk price rise.
Stubbornly low prices for generic milk need to rise immediately as drought pressures mount, Queensland dairy farmers say.
The Queensland Dairyfarmers Organisation were successful in their quest to end the era of dollar-a-litre milk earlier this year, with Coles, Aldi and Woolworths bumping up the generic price tag to $1.10 in February.
Coles and Woolworths announced the extra 10c would be passed directly to farmers, seven years after the dollar-a-litre scheme was introduced.
However, Aldi moved to rise the generic price to $1.20 a litre in July and was quickly followed by Coles and Woolworths. All three did not increase farmer aid as a result.
QDO president Brian Tessmann said dairy farmers nationwide welcomed price hikes to better reflect the true value of the product.
However, he said it angered many in the industry that supermarkets had changed their tune on both pricing and assistance to farmers.
“For years, Coles and to a lesser extent Woolworths, were adamant that generic milk needed to stay at a dollar-a-litre because that’s what the customer expected,” Mr Tessmann said.
“We’re now at $1.20, which is still very low, a lot lower than most bottled water on sale in supermarkets. We should be seeing it rise to at least $1.50 a litre and the benefits of that following through to farmers.”
While Queensland has been the epicentre of the dollar-a-litre anger, Victorian group Farmer Power has also called for the extra 10c to be passed on to producers.
At the time of the 2011 dollar-a-litre introduction, dairying groups noted that 1992 was the last time milk was sold at the $1 mark before the marketing move.
If milk rose at normal inflationary levels from 1992 to 2018, the price of generic milk would now be $1.89 a litre.
Mr Tessmann said the exodus of dairy farmers in the past two years had tightened up supply considerably.
“If market forces were being truly reflected, we would be seeing a sharp rise in the price of milk to reflect the dwindling supply,” he said.
A Coles spokeswoman said the supermarket had raised more than $16 million for farmers during the past 12 months.
“Coles continues to work towards making Australia’s dairy industry more sustainable and is exploring long-term solutions with government and industry stakeholders,” the spokeswoman said.
A Woolworths spokeswoman echoed its main rival and said the supermarket had made a substantial contribution to farmers through its 10c support initiative.
Aldi did not respond in time for deadline.
Source: ALEX SINNOTT, The Weekly Times 15 October 2019