SOUTH Australian Dairyfarmers’ Association representative Charles Wallis says the industry is facing a perfect storm and that no silver bullet will fix the multiple problems confronting it.
“All our ducks have lined up in a row against us at the same time,” he told almost 250 dairyfarmers and industry representatives at a meeting in Mount Gambier on Tuesday.
“Low milk and commodity prices, a very high Aussie dollar, poor seasonal conditions and grain prices are through the roof, hay is in short supply and our variable costs are high.
“A lot of people rely on heifer exports to pay bills and that market has also somewhat dried up.”
SADA president David Basham said he would encourage SA dairyfarmers to form a collective bargaining group to supply a large pool of milk – more than 100 million litres – to strike a fairer deal with a processor.
“If it’s not that big, they won’t be bothered talking to us because there’s nothing in it for them,” he said.
“And if they don’t get that milk supply, it’s going to be lost to their business.”
After the meeting – organised by SADA – he told Stock Journal that collective bargaining was one of the very few tools dairyfarmers had to forge a deal with milk companies.
“It could be about more than the price itself and more on payment terms,” he said.
“At the moment, we get paid very little in spring ... so maybe there could be a way they could pay us more during that period.”
A short-term solution proposed by Mr Basham, which involved welfare payments to struggling dairyfarmers, met with almost unanimous approval.
A representative of the Victorian lobby group Farmer Power, Karrinjeet Singh-Mahil told the meeting there was a strong need for the industry to work together.
This would rely on avoiding “shooting” the people trying to do the work for dairyfarmers and “telling them what you think”.
“Half the problem in our industry is that we don’t get off our butts and tell those people what we need,” she said.
“Get up, tell them what you need, and then work with them to make it happen.
“We (Farmer Power) are not just a bunch of rebels trying to make trouble for everybody, we’re actually trying to work to get solutions for all of us.”
Re-regulation of the industry had been one of the ideas formulated at meetings in Victoria since Farmer Power’s inaugural meeting at Noorat in mid-January.
The idea had also been picked up by Federal MP Bob Katter, who recently introduced legislation to Federal Parliament to re-regulate the industry.
But Dairy Australia strategy and knowledge manager Joanne Bills said that it would be extremely tough to implement.
“A few people in the industry, after all these years, think deregulation was a bad idea – but it was almost inevitable,” she said.
“It was a question of whether we go through an orderly process and get something out of it, such as a package, or whether it was just done to us.
“Mr Katter can propose any legislation he likes because he won’t have to deliver it and neither of the major parties have any interest in regulating prices and making food more expensive for consumers.” Dairy Australia was in the firing line at the meeting as emotions ran high, with many dairyfarmers questioning where their levies were being spent.
But in the organisation’s defence, Mr Basham said its work was of long-term benefit for the industry.
“Research and development has very long payback time and there is a lot that happens in DA that farmers don’t see, including getting trade access into different countries and protecting the industry from outside influence such as animal welfare and food safety issues,” he said.
Mr Basham said there was a great opportunity, in a Federal election year, to put dairy in the spotlight.
“There is increased focus on the industry with the noise being made in Victoria and here now in SA – politicians are listening,” he said.
Suggestions from the audience included getting milk back into schools and to fast-food outlets, and to educate the public on the work that goes in to producing food.
Another meeting is scheduled in the central region of SA in March to be confirmed at a later date.
Tough season for Telfords
One of the State’s largest producers, milking 1850 cows, it costs the Telfords between 34 cents/litre and 36c/litre to produce milk and, with Murray Goulburn’s latest step up on Friday, they have only just started earning 31c/litre after receiving between 27-28c/litre.
Travis Telford says not only do payment structures need to change but they need to get paid more for their milk.
“Before my time, in 1992, dairyfarmers were getting 31-32c/litre when diesel was 55c/litre, plus power bills,” he said.
“Now fuel is $1.60/litre and power is five times what it was, but the milk price is still the same.”
Travis said there was no doubt the high Australian dollar was playing a big part in determining the milk price.
But he believes more needs to be done by the Federal Government to improve trade tariffs.
“Everything that’s produced in Australia goes out of the country for bugger all and anything we import we get hammered on,” Travis said.
“There needs to be some adjustment there.”
Including family labour, the Telfords – Travis, his brother Justin, father Trevor and mother Lyn – employ 17 people.
“We run a pretty tight ship – we don’t contract anything out, we watch what we spend and try and get something out of every dollar," he said.
“We’ve leased some ground for potato growing, and we are growing more crops and will continue to do so this year – anything to offset the bottomline.
“Anything outside the daily operation should be a bonus – not going towards trying to pay bills.”