Who deserves the cream of Australian dairy?

“When we have to go to four different stores or supermarkets and still can’t buy a single tin of what I need … start looking after Australian babies first before sending all of our stock overseas for a ridiculous profit. Money hungry f****.”
– Australian resident angered by infant formula shortages

Australians do not expect to see bare supermarket shelves but the unthinkable has happened. Infant formula is in short supply. Apparently, it’s all due to people sending tins of the stuff over to China where parents certainly don’t take abundant high-quality food for granted.

Australians have not only been surprised but outraged, as illustrated so delightfully by the opening quote from an anonymous news.com.au interviewee. Why, there have even been “semi-riots” at the checkouts!

The industry is struggling to increase supply, which isn’t easy as an article by Dairy Innovation Australia explains. A petition demanding the supermarkets ration infant formula has attracted around 4000 signatures and both Coles and Woolies have increasingly tightened restrictions.

Then, today, the Greens and the government agreed to make it harder for foreigners to buy Australian land and water. According to The Weekly Times, “the screening threshold for foreign buyers of agricultural land reduced from $252 million to $15 million, and down to $55 million for investment in agribusiness”.

It’s great to see that what we produce here on the farm is treasured by Australians but why isn’t it valued?

It seems milk is so cheap and abundant, it is worth less than water. Except when the farmer is offered a fair price for her land by someone who really appreciates its true value. How ironic that this the only time Australian food is too precious to leave to market forces.

 

9 Comments

Filed under Dairy Products, Farm, Milk quality, supermarket war and $1 milk

9 responses to “Who deserves the cream of Australian dairy?

  1. yerg

    We hear all these people screaming when they can’t get infant formula. Didn’t hear a peep from any of them when ColesWorth trashed the industry with $1 milk did we?

    Australians aren’t prepared to pay for “food trust” … unlike others. Other countries have had food crises and are prepared to pay for quality.

    We have become so entitled in our approach to cheap food that no one else can be allowed to pay more for it if they trust more than us.

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  2. JulieD

    Surely if the factories stop making stage 3 “toddler milk” and diverted more into “baby” formula production then the problem could be reduced?

    Science has proven that there is no nutritional benefit of formula over straight up cow’s milk after 12 months of age if the kid is eating solids anyway.
    I admit to being sucked in by the marketing hype and tried one tin of stage 3 after 12 months of mixed feeding. It turned kiddo’s poo chalky white overnight, so I chucked it out and swapped to plain old full cream- no problem!

    Is it just the “trendy” brands that are affected by the shortage or all of them?

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  3. Nigel Hicks

    Why does it happen?
    Partly because farmers allow it to happen.
    Baby formula is but the tip of the iceberg as this will become more commonplace across different food sectors.
    Now more than ever before is the time for farmers and consumers to stand together for security of supply into the future and not take for granted our great food and fibre production

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    • Andrew

      Some questions and facts

      Can you please explain Nigel … “Partly because farmers allow it to happen” How do the dairy farmers control the commercial relationships and agreements negotiated by processors?

      Baby formula uses infinitesimal amounts of milk. Fact … organic baby powder is based on EU milk concentrate which is blended with additional components when manufactured in Australia.

      Baby powder is not a milk manufacturing process, it’s a pharmaceutical process and the plants that manufacture the product have far lower output than plain powdered milk plants of equivalent capacity. Essentially more than 40% reduction in capacity. The process demands a higher level of QA and process quality as well, hence the higher cost.

      The higher prices of baby formula are basically supply/demand. The added cost of manufacture, QA requirements etc can actually mean a lower profit per litre of milk purchased by the processors than alternative products.

      Hope that helps

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      • Nigel Hicks

        Quite simply Andrew as to farmers involvement in price setting you answer the question yourself.
        Currently farmers don’t have any input into determining farm gate milk prices. Those who choose to supply the nominally farmer owned co-op’s that remain could have a involvement if they stood together and were active within the co-op but generally don’t.
        One of the few sensible comments to come out of anyone associated with the udv was one that Tyrone Jones made that farmers have around 80% of the capital involved in the dairy industry and 100% of the risk.
        This is where we see the current situation that despite varying product mixes etc between the processors farm gate milk prices are within cents if not fractions of cents of each other.
        Yes I understand that baby formula is blended with other ingredients such as rice for example and this only adds to the ridiculousness of comments by politicians of what a price boon the expanding formula market is for dairy farmers.
        I also understand that particularly for supply to China there are certain trade requirements to be able to supply to China this is why we have seen the deal a couple of months ago at he Darnum plant for example.
        If baby formula is less profitable to produce then surely particularly the co-op’s should stay out of that market as the primary objective of a co-op is to maximise returns to suppliers. That is one that upholds the true values of a co-op anyway

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  4. Go Au naturale

    Breast feeding your own babies might reduce the supermarket substance dependence for baby formula.

    I wonder what the culture / ethnic profile is of the domestic demand for post-baby formula. It would be politically incorrect to answer the question though.

    The root cause of the issue lies well beyond our shores, however the resolution lies squarely within our shores but not from the dairy industry. See previous paragraph for possible answer.

    I suspect Andrew above has more answers to questions that are yet to be asked from a production perspective.

    From a commercial perspective the $1/litre on the domestic shelves for processed milk doesn’t help the cause, nor does the highest demanding export market paying a premium for our milk based products, nor does ambivalence and pursuit of an open market/free competition from Canberra help and many other factors…including some highly debatable ones.

    No matter which way you view it, seeing supermarket shelves amiss of product to due to supply/demand pressures is going to become more prevalent, welcome to the new Australia akin to the depression of the 1940’s.

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  5. dairy farming should be intensified to obtain sufficient product

    Like

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