To the lay person, what are we to make of the milk wars? Two major supermarkets are selling milk at very cheap prices and dairy farmers are complaining that they are being hurt by this practice. How can this be? Surely farmers sell their milk at a price and it is up to retail outlets to sell milk at whatever price they want to?
As always, I have a little knowledge, which is surely a dangerous thing.
When I were a lad............yes, very much that sort of post.
My father disappeared for three days after a Victorian Dairy Farmers Association meeting in Melbourne. Mother and Uncle had called the police. I must ask Mother if she knows what happened, but all I can recall was that upon his return Father announced that he had been invited to be president of the VDFA. He was secretary, treasurer and president of various local country sport and school organisations, but I don't think he would have been effective in the above described role as he lacked the political animus. It was as well he declined.
Waffling and reminiscing again. To the point.
We sold our milk to the local co-operative, which in turn collected our milk and paid us, processed and bottled the milk, made cheese etc. It was not just the quantity of milk that was paid for. The butter fat content came into the equation too and this is where my father excelled. He bred our cows to produce very high butter fat milk. At times we received dividend payments from the co-op as well. With a couple of hundred cleared acres that supported around 90 milking cows, we lived well enough to keep mother in new shoes, something like 65 pair Father counted as he threw them out the door one day when there were budgetary problems. So, ninety milking cows could support 3 adults and four children reasonably well.
I think if a present day dairy farmer reads this, they would find that number of cows quite amusing. Dairy herds are now much larger and the collection of milk from the cows very high tech.
I believe in the nineties, dairy farms and milk production was deregulated. Clearly the move had some support by farmers, possibly very large companies that owed numerous farms. Did the government set the price paid to farmers before deregulation? I don't know. I think the government may have set the retail milk price.
Once the milk left the farmer's property, the rest was done by the co-operative, right down to door to door delivery, at times. No doubt grocers and perhaps later, supermarkets took delivery of the milk and paid the price set by the co-op. What was to stop the price of milk rising? Political pressure on the government from consumers, I expect. Milk was a important part of people's diets, more so than now.
So why is it so different now? Nothing I have heard or read, and that it quite a bit, explains it to me in any way I can understand. Why is there such downward pressure on the price a dairy farmer is paid for his product by the price a supermarket sells milk? Where else can a supermarket chain buy its milk from? New Zealand? Do farmers not join together in co-operatives so that they have some power in price negotiations? Perhaps the supermarket giants play one co-op off against another. Why no solidarity? Australia exports the majority of is milk produced overseas in various forms. Does this have a bearing?
Many questions about a complex matter. Surely we want dairy farmers to have sustainable incomes if they supply milk effficiently. There have been calls to not buy the cheap milk, at times adulterated with what is referred to as permeate, a substance I have never heard of until recently, but I think it is just a deceptive name for whey. But if you are poor, or even just cautious with your pennies, why would you pay a higher price for milk than you have to? Such calls to not buy cheap milk are futile.
While other countries could take our export market by selling milk products more cheaply to countries we now sell to, on the face of it to me, there is no alternative for the supply of milk and milk products in Australia to retailers. Have the two giant supermarkets divided and conquered dairy farmers?