This story from the ABC News on the impact of the price war suggests exports will allow dairy farmers to make a living.
It says China and South-East Asia, particularly India, will provide “huge opportunities” for Australian dairy. True, the February Dairy 2012 Situation and Outlook shows China’s whole milk powder imports have skyrocketed (see page 10).
It’s pretty misleading of the ABC news report to suggest, however, that exports will be our salvation.
First, not all Australian milk can be exported. Queensland, for example, does not have manufacturing facilities capable of producing product for export and it looks like there won’t be enough dairy farmers left there to support a factory in any case. Almost all of their milk is sold as fresh milk on Brisbane’s retail shelves.
Second, Victorian dairy farmers have long exported around half our milk; only 9 per cent of our milk ends up in cartons on the retail shelf and the ABC News report suggests we are doing better than those who supply the domestic market. The prices farmers are paid for a litre of milk in different Australian states tell a very different story. In 2008/09, Victorian farmers were paid 39 cents per litre while Queenslanders received 57 cents. In 2009/10, it was 34 cents versus 56 cents in the Queenslanders’ favour.
I am not suggesting the Queenslanders have been living it up but these numbers paint a far less rosy picture when it comes to exports, don’t you think?
The ABC also says raw milk prices have doubled in the last five years. Maybe so, but costs seem to have pretty much kept pace and the surging Australian dollar has meant that the average Australian dairy farmer has missed out on a fat pay cheque. Most of the farmers I know are struggling.
As Julian Cribb wrote in his SMH article “Huge shift in what we eat” today:
“If cities and the resources sector continue to take water and land from farmers, and supermarkets continue to punish them economically, much of our future food may be grown in factories, rather than on farms.”
Is that what Australians want?