mmg.com.au

Milk prices have dropped below the cost of production, Farmer Power northern Victoria co-ordinator Nigel Hicks said.

Mr Hicks said according to a Dairy Australia focus report, farmers had been concerned about farm gate milk prices for the past six months and this would likely become a bigger problem as the expected farm gate price was down eight to 10¢ this year.

He said input costs, including electricity, fuel and grain, were rising, so the estimated price was below the cost of production.

‘‘No wonder we’re feeling the pain,’’ he said.

Mr Hicks said unlike many countries, there was no legislative control over the price the processors pay farmers for milk.

‘‘We lost that some time ago with deregulation,’’ he said.

Mr Hicks said it was worth fighting to sustain the dairy industry not only for farmers, but also for rural communities and the whole country.

‘‘Dairy is Australia’s third-biggest rural industry,’’ he said.

‘‘There are 50000 people directly employed in this industry. In Victoria, it is greater than the car industry and the aluminium industry.’’

He said another factor squeezing milk prices was the high Australian dollar, which was making commodities cheaper to import and Australian products less competitive on the global market.

He outlined Farmer Power’s goals, which include a better, fairer and sustainable farm gate milk price, more Australian products on supermarket shelves, government support and an independent review of the industry’s representative bodies.

Mr Hicks said companies’ numerous and complex payment systems made it difficult for farmers to compare, as well as for people outside the industry to understand.

‘‘There is demand for our products out there. Why aren’t we being paid for it?’’ he said.

‘‘That’s something we must fight for — for our future, for our children’s future and the country’s future.

‘‘Milk production will increase if farms are profitable.’’