CHECKING OUT: Many dairy farmers are leaving the industry as the debate over fair milk prices continues.
CHECKING OUT: Many dairy farmers are leaving the industry as the debate over fair milk prices continues. Kevin Farmer

Dairy investigation as farmers leave industry ‘in droves’

MANY dairy farmers are leaving the industry as the debate over fair milk prices continues.

Coolabunia farmer Damien Tessmann said a few farmers had recently very publicly left the industry.

"It's absolutely a reality, it's a problem with the dairy industry and supermarkets," he said.

"Prices have crept up to $1.10 or $1.20, but that's not all going to farmers.

"We can quite clearly see the supermarkets are engaging in predatory pricing."

This comes as a senate investigation into Australia's dairy industry was secured last Thursday.

Queensland Senator Susan McDonald called for 'big stick' measures in the Coles and Woolworths dominated retail sector to help dairy farmers earn more money for their produce.

"Dairy farmers in my home state of Queensland are hurting and they've been leaving the industry in droves because it's impossible to make a decent living under the current prices they're getting for their milk from the big supermarkets," she said.

"To be clear, the industry doesn't want re-regulation, they just want to be paid a fair price for their product."

Ms McDonald said the ACCC could be given the right powers to deal with repetitious and unfair bargaining practices by food retailers.

"Unequal bargaining powers -from the retailer right through to the processors and farmers -is indirectly affecting farm gate prices," she said.

One Nation senator Pauline Hanson, who secured the senate investigation, said it was vital the inquiry is conducted to identify and expose the problems and introduce solutions.

"The whole dairy industry has been a mess over recent years, and it really doesn't look like its getting much better on its own any time soon," Ms Hanson said.

Mr Tessmann said dairy production costs differs between states.

"The prices of fuel, with supply and demand in the Middle East is reflected at the pump," Mr Tessmann said.

"The dairy industry is no different, when production is down and yet the price hasn't shifted, if that's not market failure, I don't know what is."

He said pressure needed to be put on the ACCC to ensure a genuine investigation is undertaken to solve competition issues.

An ACCC spokesperson said their 2018 dairy inquiry found supermarkets price most dairy products, including private label products, on a national basis.

"The price paid to the farmer for milk may vary in response to domestic and global supply and demand signals, yet the retail price may not change," they said.

The inquiry found the geographic location of dairy producing regions and their relative exposure to global and domestic dairy markets were the strongest influences on farmgate prices.

A large proportion of Australian milk production is exported in various forms.

"Consequently, some processors and many dairy farmers are exposed to movements in international markets," they said.

Dairy farmers now export about 36 per cent of their produce which boosts competition in the context of the Woolworths and Coles dominated supermarket structure.

Ms McDonald said dairy farmers were still in need of fair domestic prices.

"Our farmers are the best in the world and we will continue to stand with farmers of all disciplines in their right for fair prices and access to more markets," she said.

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