NSW dairy inquiry identifies cost pressure

27 Dec, 2018 04:00 AM
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We must ensure the NSW dairy industry’s survival for future generations of consumers and dairy farmers in NSW,
The inquiry found a retail price of $1 per litre for drinking milk had hurt the industry
We must ensure the NSW dairy industry’s survival for future generations of consumers and dairy farmers in NSW,

A NSW Upper House inquiry has pinpointed that the dairy industry needs immediate help to end the cost pressures driving many dairyfarmers to the wall.

The inquiry found a retail price of $1 per litre for drinking milk had hurt the industry, there was a power imbalance between farmers and processors and the farm-gate price for raw milk did not allow a reasonable profit margin, and urged the appointment of a Dairy Commissioner.

Dairy Connect CEO Shaughn Morgan said that the advocacy body welcomed the findings and 10 recommendations.

Mr Morgan said the Government and Opposition must commit to their full implementation to ensure that the sustainability of the NSW dairy industry.

“We must ensure the NSW dairy industry’s survival for future generations of consumers and dairy farmers in NSW, ensuring access to fresh nutritious milk produced in NSW,” Mr Morgan said.

“These recommendations included that the NSW Government work with retailers to ensure that the retail price of milk takes account of the on-going increases in production costs and to ensure that a levy is returned to farmers."

Dairy Connect continues to support the current Woolworths levy that has attached to 2L and 3L homebrand milk, with the producers receiving the proceeds of this levy through their processor, Parmalat.

Mr Morgan said this must continue well past the cut off date that has been announced by retailers.

“As the report illustrates, the State Government has a role to play to ensure that a form of levy is retained, with the proceeds flowing directly to the producer," he said.

“Energy costs remain high, fodder costs continue to increase and the cost of production remains above the farm-gate price.

"A levy paid directly to producers has been proven to have been of assistance in the current times of need.”

Mr Morgan said the appointment of a NSW Commissioner for Dairy, in conjunction with the introduction of a Federal Mandatory Dairy Code, would assist in the restoration of trust, balance and transparency that is required within the dairy industry.

“A NSW Commissioner for Dairy to act as an arbiter and adviser to the dairy industry on their rights and responsibilities in commercial relationships," he said.

"The Commissioner can also provide regular reports to the Government and Parliament on the state of the NSW dairy industry.”

Minister for Primary Industries, Niall Blair met with a number of dairy farmers in Lismore, NSW, last week as he began a tour of dairy operations along the North Coast.

“There is no one issue for the sector - the drought, increasing costs, low milk prices and the supply chain are all very challenging for the industry,” Mr Blair said.

He said the NSW Government would consider the recommendations made by the committee before delivering a response in the New Year.

“I expect dairy farmers will be very frank with me as they brief me on the issues and possible solutions to make sure any action we take is well-targeted,” he said.

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