Producers hit hard by price downgrade

LOSS: Expecting a price increase from Lion, farmers have suffered a 2c/pl reduction to the price they will be paid for their milk.

LOSS: Expecting a price increase from Lion, farmers have suffered a 2c/pl reduction to the price they will be paid for their milk.

When we were advised of our contract price for the 2019/20 season by DFMC, our supply cooperative and our processor Lion, dairy farmers in the North felt hugely disappointed.

Simply put, a 2c/pl reduction to the current price given the current environment is not fair play.

It's been a tough 12 months for dairy producers on the Atherton Tableland.

Production costs have soared on the back of higher input prices such as grain, protein and hay coupled with a season where home-grown feeds have been much less productive due to an especially dry spring followed by a wetter autumn than usual.

There is no overproduction at the moment; excess milk has not been trucked out of the area for months.

Given that there is genuine competition for milk across the country, with processors jockeying for diminishing milk supplies to more fully utilise their factories, we felt confident that in this environment, a price increase was imminent.

Not only was a price increase needed but given the conditions of the last 18 months here in the Far North, it is well and truly justified.

The pricing letter from DFMC (which was released in a public forum on Facebook) was misleading and lacking in detail to say the least.

With the phrase "after positive negotiations with our processing partner Lion Dairy & Drinks the DFMC Board wishes to announce the following competitive milk prices" one could have been mistaken for thinking that the price announcement to follow would be a good outcome.

On closer perusal the stark reality becomes evident - we lose our Dairy Pride partnership payment and everything else stays the same. In effect, farmers have received a 2c/pl price reduction.

We are told that supply and demand affects the price received for all produce, but this certainly does not ring true for dairy producers on the Atherton Tableland.

This decision severely undermines the confidence of the remaining farmers who are battling hard to supply a wholesome fresh product to Far North Queensland. It effects the value of properties and the value of their cattle and makes it even more difficult to secure bank finance.