By Ross McInnes, QDO Vice-President
Recent Victorian news articles have contained assertions that if left unchecked would misrepresent that state of the domestic milk industry. These comments about Coles, with its Victorian Farmer Federation (VFF) Farmers Fund, implied that farmers were simply misinformed and the United Dairyfarmers of Victoria (UDV) was jealousy of the scheme as it had not thought of it. A more accurate ascertains would have been that dairyfarmers and their representatives were sick of another cynical PR exercise.
The articles go on to falsely infer that Victorian dairies only contribute 4% of production into fresh white milk. The Dairy Australia data however states that Victoria produced 6.18 billion Litres with packaged milk sales consisting 635 Million litres (ML) or 10.25% in 2015/16. Of this figure fresh White makes up 80 % of that total or around 508ML.
The low Southern milk price has brought many ideas for a solution, but when you consider everything that cannot be influenced, and Canberra’s reluctance to talk about any levy, there are few credible options available.
The retailers have misused industry statements to suggest that the value of all milk in Australia is priced off the export market. This appears to be used to insist on rise and fall clauses on Southern domestic tenders. The fact is only twice in the last 12 years has the Qld and Victorian milk price moved in the same fashion.
If the Australian production drops by 7% as predicted, the domestic share will be about 72%, which makes you wonder why values are based off the export price. It’s fair to say that with while retailers continue insisting on rise and fall clauses, it is in their financial interest to maintain them.
If the Victorian domestic market price was respected and valued with flat long term price, it would help in the current situation. An increase of 1 cent per litre in Victoria would deliver an extra $61.8 million at the farmgate. The $2million from the Coles-VFF Farmers Fund milk starts to pale in comparison and feels more like a sick joke.