In the face of the current drought, Coffs Harbour MP Andrew Fraser has reached out to the major players in the supermarket industry about milk prices.
Mr Fraser has written to the managing directors of Woolworths, Coles and Aldi, requesting that they increase the price of their home brand milks by at least 20 cents per litre and pass this 20 cents on to the dairy farmers.
While most dairy farms are not as severely affected by the drought due to their coastal locations, Mr Fraser said dairy farmers had to ‘supplementary feed’ their cattle all year round.
“Dairy farmers were previously paying approximately $350 a tonne for grain delivered and approximately $300 a bale for hay delivered,” Mr Fraser said.
“Due to the severe drought and laws of supply and demand, hay has now risen to $650 a bale and grain between $600 and $700 a tonne.
“This means that dairy farming is fast becoming unsustainable.
Mr Fraser believes that an increase of 20 cents per litre would hardly be noticed by consumers but would be a godsend to dairy farmers, not only in NSW, but right across the eastern slopes.
“The ‘cheap’ milk syndrome is nothing more than a ‘Lost Leader’ utilised by major retailers to attract customers, and was originally started by Aldi,” Mr Fraser added.
“In difficult drought conditions it is my belief that it is incumbent on these major retailers to assist the dairy industry”.
Mr Fraser added that “If they don’t, many dairy farmers will be forced out of business and the cost of milk will obviously increase.
“When the price of bottled water in plastic bottles, which has a virtually zero production cost, is dearer than fresh milk, one has to wonder why these retailers cannot use bottled water as a ‘Lost Leader’ rather than fresh milk which has a high cost of production at the farm gate.