Australian farmers are fearing a return of the ‘milk wars’ following major supermarkets dropping the price of milk by five cents per litre.
Speaking to The Briefing, Australian Dairy Farmers board president Ben Bennett said the small price drop could have a significant impact on the dairy industry.
Listen to The Briefing’s chat with Australian Dairy Farmers board president Ben Bennett here:
“It’s only five cents, but that’s what drives our profit margin to a considerable scale,” Bennett said.
The industry was also feeling pressure from a large reduction in farmers. Bennett said the number of dairy farmers had dropped by almost half since the previous milk wars.
This pressure was echoed by former dairy farmer Adam Jenkins, who said factors such as labour costs and climate volatility had driven up production costs while the price of milk stagnated.
“We’ve got an increase in cost of production from the inputs we’re putting into the system and so the milk price sort of hasn’t quite followed that.”
Bennett said that shoppers who could spare the cash could consider buying from alternative, local milk brands to help the industry.
“If a huge portion of the supermarket shelf is skewed down to the no frills, no nothing, no margin, let’s not make any money aspect, well, sadly, it’s gonna pull the rest of the industry down with it,” Bennett said.
By Zack Goutzoulas, a Master of Journalism student at the University of Melbourne.