FARMGATE price, milk payment systems, supermarket power and lack of leadership were in the firing line at a dairy crisis meeting last night.
Up to 600 dairy farmers, service providers and concerned community members spilled out of the Kolora-Noorat Football Club rooms at Noorat to listen to guest speakers outlining the current crisis in the local dairy industry.
- PICTURE GALLERY: Dairy crisis meeting
- POLL: Is the dairy industry at a crisis point? VOTE NOW
- Were you at the meeting? Have Your Say in the form below
Local federal member Dan Tehan and Victoria member for the south west coast Denis Napthine sat in the front row.
A cost analysis displayed for one dairy client by Warrnambool-based consultant Mike Hamblin showed a negative 12-cent-a-litre return this season, following last season’s 2011-12 return of negative 3c/litre.
Cost of production for one client was 42c/litre this year and 36c/litre the previous season.
Warrnambool-based Coffey Hunt farm accounting specialist Garry Smith said across his client-base, farmers milking mostly between 450-500 cows, average feed costs were up 15 per cent - a $150,000 rise - with the cost of power for the first quarter of the year up 50 per cent.
He estimated across his client-base earnings would be 10 per cent down on last year with a combination of cash-flow and income down $260,000.
Charles Stewart real estate agent Nick Adamson said better quality farms had dropped in value between 8-15 per cent, while others were up to 45 per cent down on peaks of several years ago.
This dire picture was followed by numerous farmer, farm service industry, Australian Dairy Farmers and United Dairyfarmers’ of Victoria representatives taking turns to address the crowd.
Several painted a picture of financial stress, including relying on family to work in the business for free and children not interested in farming because of the poor returns.
Charles Dillon from Dillon’s Dairy Supplies said he services the industry from Apollo Bay to Mt Gambier in South Australia.
The business has been running for almost 20 years, and now 60 per cent of clients are past 90 days when paying their bill.
“No one has got any money,” he said.
“It is not just the dairy farmers who are suffering, (we) all feed off the dairy farmers , small towns will die.”
Dairy farmer Adam Jenkins from South Purrumbete suggested labour market reform, such as changes to penalty rates and unfair dismissal laws would help the industry, as well as changes to fuel tax and providing small business tax relief.
For example he said Australia was one of the only countries in the world with payroll tax.
Outside of “red tape” issues, Mr Jenkins said the poor state of local roads added to transport costs.
Some other suggestions to come out of the meeting, that could help the dairy industry return to profitability in the region, included: interest free “survival loans”, a consumer levy on white milk, carbon tax compensation and public demonstrations including parking machinery in the car parks of local supermarkets.
A “working group” of five farmers, including meeting instigators Phillip Bond from Taroon and Chris Gleeson from Crossley was established at the end of the meeting.
This group would develop a list of dairy industry “demands” that would be sent to milk factories, governments and all interested parties.
Everyone at the meeting was asked to register to remain informed of possible events into the future, including supermarket blockades.
- Read the full story in tomorrow's The Weekly Times.