Dairy Farmers Protest After Dairy Processors Dramatically Drop Milk Price

Third-generation dairy farmer Byron Carins and his wife Danielle have ridden the many waves of the dairy industry, but recent moves by large dairy producers Murray Goulbourn and Fonterra Australia have been the last straw.

The Carins family, along with Byron’s brother Lester and his parents John and Helen, run two dairies in the north-east of Tasmania. However on Wednesday they were forced to let go of four of their employees, and dry off their cows two months ahead of schedule, due to a precipitous drop in the global dairy price.

Last month Murray Goulbourn, the world’s largest dairy producer, publicly announced that it would be reducing its ‘farmgate milk price’ from $5.60 per kilogram of milk solids (abbreviated to kgMS) to just $4.75. Then last week Fonterra Australia, announced it too would be dropping its average cost from $5.60kgMS to $5kgMS.

This matters to the Carins because the farmgate milk price, which is apparently set by global supply and demand, is the price the company will pay to buy milk solids from the farmers. The farmgate price is supposed to be regulated by larger companies, but the Carins say the price is now much too low.

Mr Carins told The Advocate that with the reduction in price, the farmgate milk price would be $1.91kgMS for the last two months of the season (May and June). Making it more concrete he explained that before April farmers were getting 55c per litre of milk, but now in May and June the price would be just 15c for a litre. However the production cost for the milk is an average of 30c per litre.

“Every day we have the cows out we are losing more money, we can’t produce milk for 15c a litre,” Mr Carins said.

“We had to let four guys go yesterday and we’ve had to dry all the cows off early. Some of the cows we’ve already sold…”

Mrs Carins said that, while the family did understand what might cause a reduction in the price – such as market over supply and a stronger Australian dollar – there was no need to so dramatically reduce the price. She hoped that a review of the global prices could be undertaken to help in reducing some of the strain on farmers.

The Carins said that the reduction had made them lose faith in the dairy industry, and that in three generations of farming they had never seen such an enormous drop in price. It has already been a challenging year for Tasmanian dairy farmers, with a longer dry season seeing feed become more expensive and harder to come by.

Mrs Carins posted a video on Facebook of her and the Carins family protesting in Launceston Mall, hoping to raise awareness of the pressure that dairy farmers are under right now, and to make it clear to companies like Fonterra that these kind of price drops were not acceptable.

Sign the petition here if you agree.