Government report confirms severe milk price war impact

The latest AgTrends report from the Queensland Government has confirmed the ongoing and devastating impact of the supermarket milk war and the on-farm impacts resulting from $1/milk discounting led by major supermarket chain Coles.

The report, just released, has confirmed that some 50 farmers have left the industry since the price war started, returns to dairy farmers have dropped further and milk production in Queensland is suppressed and not meeting the demand for the State’s drinking milk needs. It is expected that another 40 or so dairy farmers could exit the industry this year due to low returns.

Queensland Dairyfarmers’ Organisation President Brian Tessmann said the devastating impacts would not be news to dairy farmers, who were all too aware of the impacts – but that it must act as a wake-up call to consumers and the government.

“The bottom line is that the supermarket milk war is creating a real threat to Queensland’s milk supply and for our State to continue to supply itself with milk,” Mr Tessmann said.

“We have already seen some 50 farmers exit the industry since the milk war again and it is wrong that we could yet lose a lot more. The impacts are devastating and we are losing farmers we should not be losing, including progressive young farmers.

“Simply, milk at $1/milk, despite the ridiculous claims from Coles to the contrary, is not a fair and sustainable price for fresh milk. It is having seriously negative impacts right through the supply chain to dairy farming families.”

Mr Tessmann said the Queensland Government report stated that about half of the Queensland dairy farm population was unsure whether they would still be in the industry in the next five years if milk prices and farm financial returns do not improve.

“This would be a devastating outcome for the industry and Queensland milk consumers,” Mr Tessmann said. “Consumers can help by buying branded milk products, which represent a more realistic value of fresh milk.

“But it is crucial that the Government step up and address these imbalances in the market. This means working with the industry on a compulsory code of practice and a supermarket ombudsman.

“Clearly, this report shows that action is needed and it is needed now.”

The report is available via