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The Forum > General Discussion > Discount milk

Discount milk

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There is little doubt that the ongoing milk war, being waged between the big two retail giants, is really hurting the farmers.

Now while these retailers tell us that they don't pay lower rates on premium milk, what they don't tell us is that the majority of farmers premium milk sales have plumitted, resulting in near finacial ruin for many.

So the question is, are we (governments) going to simply sit back and watch this industry ( dairy) die a slow death, or, are they actually going to put a stop to this grubby tactic from the big two.

Let's face it, consumers won't stop buying the cheap milk, as most are struggling with increases to most things we use.

I would also suggest the big two could continue cheap milk sales, but wear the discounts themselves, rather than rape the farmers.

But then the greedy share holders would rebel.
Posted by rehctub, Sunday, 21 October 2012 7:40:30 AM
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*I would also suggest the big two could continue cheap milk sales, but wear the discounts themselves, rather than rape the farmers*

Well they do wear the discounts themselves, Rechtub. Coles has
actually increased the price they pay for milk. The real problem
is in manufacturing milk prices or tier two milk, which has dropped
as low as 14c a litre for farmers. As you might know, most of our
milk lands up as milk powder and cheese, sent to China, Japan etc.

So its not fresh milk prices that are low, they provide most of the
money so that farmers can be paid 40c plus a litre.

The real problem is milk manufacturers, owned by such internationals
such as Kirin Brewery of Japan. Your "Pura Milk" is Japanese owned.
etc. When they are prepared to work on a margin of 3-4c in the Dollar
as Coles is, I will take note. Meantime of course they will have to
screw farmers to make healthy profits.

The better option for farmers would be to produce less milk, so that
most of it goes for drinking and not manufacturing, at the discounted
price.

At a dollar a litre, there should be plenty of margin to pay farmers
half of it or 50c, 25c to the processor and another 25c to Coles.
Why is that a problem?
Posted by Yabby, Sunday, 21 October 2012 1:43:33 PM
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Ok Yabby, so you're saying that the discount war on milk is not effecting farm gate prices and, that the reason they (farmers) suffer is due to over production for the likes of powdered milk.
Posted by rehctub, Monday, 22 October 2012 7:01:36 AM
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http://www.dairyaustralia.com.au/Statistics-and-markets/Production-and-sales/Milk/Drinking-Milk-Sales.aspx

Rehctub, Australia produces around 9 billion litres of milk, around
2.3 billion are for fresh milk. They call that tier 1 milk and it
is already paid at a much higher price then most of the milk, which
is manufacturing milk. The price of that has halved in the last
year, as it fluctuates with the Dollar and the international price
of butter, milk powder and cheese.

If farmers only produced drinking milk, which is quite high in
price, they could be paid 50c a litre and make a profit.

But when you are being paid down to 14c a litre for some of the milk,
no wonder things are tough.
Posted by Yabby, Monday, 22 October 2012 10:43:33 AM
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Yabby, with the costs of compliance, food safety laws and the like, farmers simply can't afford to produce drinking milk only.

They, like many others are caught between a rock and a hard place.

Powdered milk, the imported kind, may well be our only choice is five or ten years the way things are going.
Posted by rehctub, Monday, 22 October 2012 10:32:15 PM
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Rehctub, your policy of socialist type government intervention and control goes against all concepts of capitalism and free market forces.
And here I was, these past few weeks, thinking you were right wing. I do apologise.
Posted by DiamondPete, Tuesday, 23 October 2012 2:09:41 AM
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