By Michael Giles
THERE’S welcome news this week for dairy farmers, and the economy of South Gippsland, with Burra Foods giving a firm price signal to the other players in the market by opening almost 15 per cent up on last year.
With Rabobank confirming what many knew already, that there has been a marked fall in milk supply this year, expected to be 8 per cent overall, the message is clear.
If factories want the milk, they are going to have to pay for it.
They say milk production in Australia was down 11 per cent in January alone and the following three months are looking very lean as well.
We’ve also seen big numbers of chopper cows hitting the market and farmers, even in this area, drying off early to reduce costs.
The main factor of course is the drought but the run of poor prices over the past few years has been the signal to some to give up dairy farming for good, especially in the north of the state.
So, the extent to which we get Australian milk production back up to previous levels, to the levels that local manufacturers need, is by no means clear.
In other good news for dairy, the Global Dairy Trade indicator has been going up steadily over the past five months which is also painting a better picture for local producers.
So, hopefully, once we do come through the drought, the outlook will be much better for dairy farmers, and in this regard, we are seeing the good effects of recent rains in paddocks across this area.
But a couple of things still stick in the farmers’ craw – the ridiculous state of affairs on the supermarket shelves and the unfair impact of local government rates.
Although fresh milk sales provide a relatively small portion of a farmer’s income, it’s an absolute insult to see their excellent product being sold at such a heavily discounted price and both the manufacturers and supermarkets need to address this.
Local government rates are another issue of concern, tied in with the whole question of rating equity in regional areas where country people are paying three times the rates of their city cousins.
It’s a regressive tax and if the state government is fair dinkum about reforming local government, they need to address this growing problem, notwithstanding the impact of their rate cap.