GOVERNMENT intervention is being eyed to save Queensland's dairy industry as major retailers continue a milk pricing war.
In 2000, there were 1545 dairy farms in Queensland. In 2010, there were 610. The number has dropped below 540 and will likely be below 500 at the end of the year, The Australian.
Queensland already has to import milk from southern states three months a year because of a lack of local product.
The dairy industry warns fresh milk could disappear from grocery shelves in the future, replaced with imported milk and ultra-high temperature milk common in Europe and Asia.
Fewer dairies could also lead to less choice or higher prices of milk.
University of Sydney professor Yani Garcia, director of the Dairy Research Foundation, said the public should be worried about the consequences of $1-per-litre milk pricing on the industry.
"Its long-term survival is more doubtful," he said. "There is a perception that fresh milk is a cheap product. The reality is it's not. It takes a lot of effort to produce."
Faced with little government assistance and retailers unwilling to pay processors more for milk, dairy farmers are selling their land to more profitable beef cattle farmers, housing developers and mini-farms for lifestylers.
Australian Dairy Farmers president Noel Campbell said Coles and Woolworths discounts were devaluing milk to lure customers deep into their stores to buy other items on the way out.
"By putting continued pressure on the price, our businesses become unviable," he said. "The whole chain is suffering at the moment. We're basically at a breaking point."
Mr Campbell said there was an "absolute threat" that fresh milk could be replaced with long-life UHT milk common in other parts of the world. European statistics show seven in 10 people drink UHT regularly and it accounts for up to 95 per cent of milk consumption in France, Spain, Portugal and Belgium.
"There will be a move away from fresh milk to high temperature milk that won't be fresh. It also has a different taste profile," he said.
Queensland Dairyfarmers Organisation president and South Burnett dairy farmer Brian Tessmann said many farmers were earning just 50 cents a litre.
"There is no margin," he said.
"Those farmers who have to repay the bank are actually going backward."
Queensland LNP senator Barnaby Joyce has flagged the possibility of government intervention in the milk industry to prevent farmers from going broke.
Senator Joyce said the Coalition, if elected, would review the Competition and Consumer Act to see that future price wars did not hurt small business and farmers.A strengthening of the laws would allow the Australian Competition and Consumer Commission to intervene in circumstances where market power was being abused.
Full report, The Australian.
