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Monday 11 February 2013 Australia

Milk prices

The Western Australian Farmers Federation (Inc.) (WAFarmers) Dairy Section President, Phil Depiazzi, believes there is an urgent need for dairy farmers, milk processors and supermarket retailers, to meet so that true value can be extracted from the Dairy Industry.

“The issue with milk prices has gone on for far too long and now is the time for action,” Mr Depiazzi said.

“Richard Goyder made public comment on Thursday stating that poor farm gate milk prices were due to an oversupply, and that is simply wrong. There is no oversupply of milk in Western Australia and we will again be short of milk this summer, unable to supply domestic market needs.

“On projections using data from Dairy Australia, Western Australia will be unable to meet domestic market supply for six months of the year and there needs to be an understanding that to have a sufficient milk supply, there needs to be a slight surplus.”

Mr Depiazzi said dairy farmers were struggling and the WAFarmers Dairy Section would now seek a joint meeting between farmers, processors and retailers.

“If it was a simple case of supply and demand, as suggested by Mr Goyder, then farmers should have received around 55 cents per litre as we did in 2008 under similar conditions. Farmers have limited ability to negotiate prices with the processors, milk is a perishable product that needs to be collected daily and farmers cannot hold milk while they negotiate a better price,” he said.

“Mr Goyder said ‘if farmers are prepared to sell milk to suppliers at the prices they do, then that’s their prerogative. This is the market at work’; we believe the market is not working.

“The last time farmers had any market power was in 1999, when farmers, processors and retailers were able to negotiate a farm gate price. At the time, 48 cents per litre was required to ensure the State had sufficient milk supply to meet local demand.

“We don’t hold Coles responsible for what has happened to milk prices over the last 10 years since deregulation; however we do hold them responsible for the way they have used their power over last two years.

“Coles are a big part of the problem, but they can be a much bigger part of the solution and we look forward to working with them and all concerned in the future,” Mr Depiazzi concluded.




Source: 5mpublishing

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