Tuncester dairy farmer Paul Weir says milk producers are being caught in the cross-fire of the supermarkets’ milk price war and risk financial ruin as farm-gate prices are driven lower.
Tuncester dairy farmer Paul Weir says milk producers are being caught in the cross-fire of the supermarkets’ milk price war and risk financial ruin as farm-gate prices are driven lower. Jacklyn Wagner

Big chains milking farmers

DAIRY farmers are stuck in the middle of a blame game and being squeezed out of existence, according to a Tuncester producer.

Responding to the start yesterday of a Senate inquiry into milk pricing, Paul Weir told The Northern Star dairy farmers are on the borderline of financial ruin.

“The processors blame the supermarkets, the supermarkets blame the multinational processors, and we are stuck in the middle,” he said.

“We take all the risk and all the price hits.”

Mr Weir is a fourth generation dairy farmer who works a property of 120 hectares at Tuncester, west of Lismore.

He milks 300 Holstein-Friesian cows and supplies milkto the Dairy Farmers Milk Co-operative.

“Seven days a week, rain, hail or shine, we are there working the farm,” Mr Weir said.

He is pessimistic about the future of dairy farming and critical of both sides of politics and what he claims is a lack of respect for farmers generally.

“Neither side have shown much initiative towards farmers,” he said. “If you are in the domestic market, if you are providing food for Australian tables, then you have a licence to go broke.”

At hearings in Melbourne, dairy farming groups have criticised supermarket giants Coles and Woolworths for initiating deep cuts to the price of milk, saying it will damage the dairy industry, hurt small business and reduce consumer choice.

Greg McNamara, chairman of the Lismore-based Norco dairy co-operative, was part of a delegation which addressed the Senate inquiry for 45 minutes yesterday morning.

“We summarised our position, they asked us questions and for more information on the costs of production, processing and delivery,” Mr McNamara said.

“This is a significant issue for the farming sector.

“At some point there needs to be some consideration of farmers absorbing these costs.”

Mr McNamara fears the impact price pressures will have on the industry.

“Processing margins will come under pressure and will flow back to the farm gate at a point in time,” he said.

Mr McNamara's concerns seem to be validated by supermarket chain Woolworths.

In their submission to the inquiry, Nathalie Samia, Woolworths' group manager of government relations and industry affairs, said:

“Ultimately, these prices set a new benchmark, and can be expected to flow back to processors and farmers as new supply and pricing agreements are negotiated over the coming months and years.”

However, Mr McNamara said farmers would not tolerate having to borrow more money to continue farming.

“They will actually exit theindustry,” he said. “There were 300 farmers supplying Norco 10 years ago, now there are 165,” he said.


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