Imagine suddenly losing up to $4000 pay a month.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
That’s the bleak reality Bandon Grove dairy farmers Matt and Emily Neilson are facing after processing giant Murray Goulburn cut the annual milk price from 52 cents per litre to a base price of 46.7 cents.
And they’re not alone. Every Hunter farmer who supplies to Murray Goulburn or other dairy processing companies have also had their income slashed.
The move has left some farmers - who produce a large quantity of milk – more than $10,000 out of pocket every month.
The Neilson’s are loosing between $3000 and $4000 in each paycheque, depending on how much milk they produce each season.
Spring will be their toughest season yet when milk prices drop to the base rate of 46.7 cents a litre to reflect the large supply of milk in the market.
Mr Neilson welcomed the Australian Competition and Consumer Commission’s inquiry into the national dairy industry, which was announced last week, but was skeptical it would lead to a better milk price.
“It’s tough, we’ve been cut a lot more than we thought and we do all the work ourselves and that’s hard enough,” he said.
“I’d hate to have to be paying people to do the work, we couldn’t afford that.”
The inquiry will look at the supply chain, the farmer’s agreements and contracts and the impact global conditions and retail prices have on profits.
The final report won’t be submitted to the government until the second half of next year. The findings will contribute to the federal government’s election promise to establish a commodity milk price index.
“I don’t think much will come of it, not for a while anyway,” Mr Neilson said.
“I can’t see the situation improving for at least 18 months.”
The Neilsons will sell some of their cows to keep more grass in the paddocks to feed their herd.
They wanted to plant more lucerne to make quality hay, but that plan has been put on hold because they can’t afford the seed.
“The cheapest way to feed the cows is to keep the feed in the paddocks,” Mr Neilson said. “Grain is the cheapest it’s been so we’ll keep buying that to feed them because it’s a good way to keep production up. “We have no choice but to cut back.”
Murray Goulburn enforced the new pricing scheme from July 1. It came after the milk price was slashed in Victoria and Tasmania, forcing many farming families to walk off the land.
A global oversupply of dairy products has been blamed for the cuts.
Farmers have urged shoppers to buy more dairy products to help the industry.
.