The dairy industry is fighting its way through “a perfect storm” of drought, high water prices, and costly feed which has produced one of its worst years ever.
The chairman of Dairy Australia, Jeff Odgers, told the industry organisation’s annual general meeting near Warragul in Victoria’s Gippsland “there is no doubt that 2018-19 was one of the toughest seasons in living memory.”
“Australian dairy has been hit by a perfect storm, which we must try to work our way through,” Mr Odgers told delegates.
Mr Odgers’ remarks came as the association representing NSW farmers said an online survey found 90 per cent of respondents would pay more for milk, and urged retailers to sell it for no less than $1.50 a litre, saying over the past 12 months 51 farmers had left the industry in that state alone.
In northern Victoria, which has been hit by severe drought and where the price for irrigation water on the spot market has risen eight-fold, many farmers endured such losses that they have sold up.
“It’s fair to say that that now is playing out in varying degrees in different parts of the country,” Mr Odgers, who operates a large dairy farm business in Shepparton in Victoria, said.
It was harder to remain profitable, and some farmers just could not see a way forward and were getting out.
Next week Dairy Australia will release its national plan to secure the future of the industry.
“People will make choices, but this is what the dairy plan is about,” Mr Odgers said.
Milk production declined 5.7 per cent, and dairy farmers needed to carefully work out how to maintain profitability including “having boots on the ground where needed” in the form of professional advice.
“Dairy has a future, and it will continue to evolve,” Mr Odgers said.
But it needed a campaign to achieve greater levels of profitability, efficiency and trust within the community.
“Building community trust is more important than product promotion,” Mr Odgers said.
“Dairy Australia aims to connect with socially conscious consumers.”
A survey had found 70 per cent of respondents trusted the industry, while 84 per cent had trust in its products.
During a question and answer session with the farmers and other industry operators who make up the membership of Dairy Australia, a woman expressed concern that vegans were getting the upper hand in urging consumers to give up milk.
She said in one conversation, a vegan had told her “I am a vegan, I am your enemy.”
Mr Odgers said while such concerns were being addressed with a campaign targeted particularly at millenials, “you can’t replace milk.”
In an interview with The Australian, Dairy Australia’s managing director, David Nation, said “the biggest single challenge facing the industry is its feed base.”
Drought had meant there was less grain and other fodder being grown, reducing supply and increasing price.
“We find we are operating in a difficult, volatile environment,” he said.
Also Friday, the NSW Farmers Association urged consumers to use their power to demand fair pricing for dairy products such as fresh milk, cheese and butter.
NSW Farmers dairy committee chair Colin Thompson said the consumer “is a dairy farmer’s best advocate”, with more than 90 per cent of respondents to an online survey saying they would pay more for generic brand milk in the Association’s Facebook and Twitter polls.
“We need a fair price for our dairy products to ensure farmers can continue producing. The retail price of fresh milk must start at $1.50 per litre,” Mr Thompson said.
“The supermarkets’ private label milk and cheese products have been heavily discounted for a long time now and it has taken its toll on the industry.”
“If something doesn’t happen soon, dairy farmers will continue to exit the industry. Our industry has lost 51 farmers in the past 12 month in NSW and the situation is even worse in states like Queensland.”