Big supermarkets, little farmers: the UK story

In the wake of the milk price war here in Australia, this story about the influence of supermarkets in the UK (click the underlined link) is a little unnerving. How can we prevent this happening here? Victorian farmers are less vulnerable to predatory tactics by big retailers for two reasons:

1. Much of our milk is exported; and

2. Victorian processing is dominated by a powerful 100% farmer-owned co-operative.

Having said that, we do share some concerns regarding the profitability of milk pricing.

Dairy Australia’s Australian Dairy Industry In Focus 2010 report says:

“At an average of approximately US$29 per 100kg of milk last year, Australian dairy farmers generally receive among the lowest prices compared to many major producing countries and so must operate highly cost-efficient production systems.  This is regularly borne out by international comparisons; where Australian farms consistently have costs of production in the lower cost category of all farms in such surveys. The fact that around half of Australia’s milk production has been exported over the last decade reflects this high level of competitiveness.

However, this has become increasingly difficult in recent years. Farm cost structures have increased in response to the need to adapt to drier conditions where rain fed pastures are regularly contributing a lower proportion of the total feed base available to the herd. Consequently, Australia’s share of international trade has trended lower as local milk production has contracted over the past decade.” (p. 10)

4 Comments

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4 responses to “Big supermarkets, little farmers: the UK story

  1. Cattle Carnage

    I know it’s not feasible in all areas but where I live we have two farmers markets in our region. One every Sunday in one location and another every Saturday in another location. Farmers sell their produce direct to the public which includes fruit,veg, yoghurts, cheeses & meat. the produce is so fresh and cheaper than supermarkets so they are a huge success. when the markets first started up, the fruit & vege section of Coles was decimated. I have friends who grow tomatoes and sell them to both Coles, Woollies, Aldi and at the markets. they make much bigger profit from the market but admittedly the bulk goes to the supermarkets. There should be more farmers markets around!

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  2. Lisa Claessen

    This situation bothers me terribly here in QLD, and I try to have conversations with my Home Economics and Agriculture kids about why it is important to think about what is happening in supermarkets, when cheap milk,eggs, vegetables, etc are on offer. It will come back to bite the consumer in one way or another in the future. Kids are genuinely interested in how it all works. They often know someone in the district who has got out of dairying in our district, in the the last decade or two because of deregulation.
    My self, I am happy to buy milk from smaller producers, co-ops, etc, at a premium price, but I understand too, why there are those that cannot and those that are not interested. I also enjoy farmers markets too, not necessarily because of a belief that it is all “organic”, or better, but because I like to think I can give money straight back to a farmer who works darn hard to provide and grow produce.
    Produce is only going to get dearer in the future, and there are many who feel food is too hefty in price now! We ask a lot of the people who produce our food, and many are ignorant of what it takes and what the costs are. The effort you spend highlighting your day to day workings on this blog is a special gift that help explain so much. Thank you,
    Maybe farmers can band together and look at opportunities like cooperatives, and value adding concepts that put them more in control of what they produce. The beetroot growers in our district are being forced to rethink their future because Golden Circle is taking its production to New Zealand. We are all hoping a scheme can be found that allows the continuation of the industry, keeps production local and helps maintain the legacy of community.

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    • milkmaidmarian

      Thanks for your comment and for supporting farmers, Lisa. Our co-op, Murray Goulburn, is a big farmer success story and processes 35 per cent of Australian milk, so it can be done! I am sure that if we didn’t have such a strong farmer owned co-op, we would receive much less for our milk.

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