Dairy farmers angry over slashed raw milk prices

Dairy farmers angry over slashed raw milk prices

Dairy farmers in Australia have expressed anger over decision by Murray Goulburn and Fonterra to cut prices paid by them for raw milk.

A group of dairy farmers called, Farmer Power is urging federal Agriculture Minister Barnaby Joyce to conduct an independent review of the Australia's dairy industry. They are asking the government to intervene after the companies started announced decision to pay lesser value for raw milk. Murray Goulburn reduced its farm-gate price from an average of $5.60 to $4.75-$5 in the previous month and Fonterra, which is obliged to meet Murray Goulburn's prices under its supply agreement, also reduced prices from an average of $5.60 to $5.

Chris Gleeson, the head of the group, said that the move by the companies to cut the farm-gate price is threatening to force farmers off the land, cull herds for meat or even force them to move completely to beef farming. He said, "Saleyard figures indicate a real risk that herd numbers are already being reduced, and that without immediate action the industry will continue its downward spiral," Mr Gleeson said. Mr Gleeson also said that it is a type of retrospective reduction in milk price and said that the group will fight the changes.

Experts say that price cuts, which are known as "step downs" in the industry, are rare but force farmers to loss making ventures. They warned that the companies will pay even lower than Murray Goulburn's $4.75-$5 and Fonterra's $5in the coming months in order to achieve meet the new average prices.