What shoppers are not told is that while the duopoly fights it out on the supermarket floor, the country’s farmers have paid the price of cheap milk. 

Wallalong dairy farmer Dallas Clarke is about to sell the last of his mostly Holstein herd tomorrow, having been squeezed out of the market.

But hardest of all was having to let his staff go.

“I was very sad when I had to tell my staff – 10 in all, four full-time,” he said.

He and wife Juliet bought the property Bowthorn on April 1, 1969, which was close to 800 hectares and the herd numbered more than 600.

At the farm’s peak in June 2000, it held the biggest quota for milk in the state.

Now the farm is about 180ha, the herd is down to 230 cows and the quota – or allocation – has halved.

The price war and monopoly of milk processing by Lion Nathan National Foods has put the squeeze on farmers and this, together with the rising price of electricity including the impost of a carbon tax, as well as the cost of feed, has left many farmers in despair. 

More than half of the state’s dairy farmers have called it quits.

“I think my production here at my peak was five million (litres) – but I never achieved that milestone and only produced 4,999,995 litres. 

“Now I am limited to 2.6 million litres a year. And on July 1, 2000, our price dropped from about 50 cents to 19 cents a litre.”

The processor pays for milk under two tiers. The first is the estimate they can sell and tier two milk is surplus milk.

“My milk allocation was 11,500 litres a day and now all they’ll pay me for is 7500 litres, unless I accept 13 cents a litre for the tier two milk,” Mr Clarke said.

“That goes for every dairy farmer who supplies National Foods through Dairy Farmers – every dairy farmer from here to South Australia – about 600 or 700.

“In the last two months I have sold about 150,000 litres of milk at 13 cents a litre.

“And there’s not an Australian-owned processing plant north of the Victorian border with one exception – Norco in Lismore, it’s a co-op, and they are the highest paying factory in Australia at the moment.”

And the last straw for Mr Clarke was the recent rise in production costs.

“I have survived the milk war,” he said. “Somewhere in August it was announced we would be getting 13 cents a litre for tier two milk – that is milk which is surplus to what they reckon they can sell and it went down from 23 cents a litre to 13 cents a litre.

“And they cut our allocation by 9.5 per cent and dropped the price by approximately five cents, so that resulted in my monthly income dropping by about $40,000.

“On top of that my power bill has risen $3000 in the last two months – I now pay $6000 a month for power and $1301 of that is carbon tax.

“And the grain bill for the cows, because it’s dry, has gone up to another $8000 a month.

“If you add all that up I have a decreased cash flow of about $600,000 a year.

“I can’t stand it, I’ve had it.

“In 62 years I have never had a public holiday off and this will be my first Christmas without having to milk. And I never go away  because I love my cows too much.”