Cheap Milk


One would like to think that it would be reasonably easy to work out what is happening with milk pricing in Australia.

I have spent some time on this subject and I am still not sure.

It seems that the price the farmer receives for their milk has dropped because of a shift in world prices. As with so much of our produce, eg gas, the price we pay for Australian milk is linked to the will of international corporations and their movement of money.

I am sure that while the farmers at this end are being paid less, that the Big Money corporations are maintaining their levels of profits.

Australian milk distributors have been caught in this shift and have reduced amount they now pay their farmers. The worst case being Murray-Goulburn that used to be a farmers’ cooperative but was convinced to be privatised and open up to the share-market. Due to a strange set of decisions and the flow on from the world shift in prices, the corporation recently sought a claw back from its farmers a heap of money already paid to them.

In researching this topic, I could find all sorts of articles that justified the low price that our major supermarkets use to justify their dollar milk pricing that they offer us, the shoppers. It would be easy to accept these arguments, if you accepted that the big supermarket sector always has the country’s interests at heart (chuckle). But…..

Then we see milk farmers on the streets protesting their treatment by the supermarkets. They are witnessing friends walking off farms and others committing suicide. So something must be wrong.

Meanwhile we walk into any of the big supermarkets to be greeted by cheap milk – usually home-branded. So is it cheap milk?

Well yes – but while the milk is cheap we pay for it through the adjustments that supermarkets then apply to other key items. That is, the discount we receive on milk has been used to draw customers into the store knowing that the profit margins remain the same through adjustments on the other items we shoppers need to buy.

The only losers it seems are the farmers.

So the question we face as we reach for that cheap milk is how much do we care for the farm sector in Australia? So what can been done?

Some statistics were released that show that shoppers have responded to this situation by not buying the cheap milk. The percentage of shoppers who buy the cheap milk has fallen to 50%.

I have spent some time researching the next question – being which milk will see real money go back to the farmers?

The answer seems to be unclear. The best advice I can find is that you avoid the home brands. However I have also noticed that you can find right next to the well-labelled home brands others that pretend to be local milk.

Given I shop across several locations and several supermarkets, I find I need to stop and think about it every time I shop. It is not easy.

A word or two on being such a shopper – being one looking out for milk that provides some real payments to the farmers – I caution against the vigilante approach whereby some people feel the need to challenge others who chose to buy the cheap milk. There was a nasty case of this recently.

We do not need any ‘holier than thou’ self-appointed vigilantes wandering about our supermarkets – or anywhere else.

This article is about raising the issue.

There are those among the serial commentators who have jumped in in other forums to defend the government and the Big Supermarket sector. Good on them.

To the others I ask – have you any other information you could offer about this milk issue? Do you know of any other research on the topic? I would appreciate any such information.

Has anyone evidence on which of the many milks sold in Canberra represents a good price paid to the farmers?

If there is anyone out there with current experience on the farm – or with relatives on a milk farm – please offer some thoughts on which milks we should be buying– here’s your chance.

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