Around 200 farmers attended the ACCC forum at Taree’s Club West as part of the inquiry called by Federal Treasurer Scott Morrison last October into the competitiveness of prices, trading practices and the supply chain within the Australian dairy industry. 

ACCC commissioner Mick Keogh, who hosted the forum, said the numbers of farmers present at the meeting spoke volumes to the ACCC. 

“The room we originally booked had to been expanded to four times the size,” Mr Keogh said. 

“We’re very grateful for farmers making this time available – we know what a burden it is because their time is very valuable.”

Mr Keogh said having farmers from around five processors, such as Murray Goulburn and Parmalat, sharing their views was “very useful”.

“Farmers spoke on the imbalance of power, the limits of collective bargaining and that they feel they are very much price takers, with no influence,” he said. 

Mr Keogh says the significance of this inquiry is that the ACCC has obtained a mandatory information disclosure, meaning both supermarkets and milk processors will be required to share information on their margins and profitability.

If information is not shared it will be a breach of the law, which will result in penalties. 

“The power to get information is critical,” Mr Keogh said. 

“This is a forensic look at the Australian dairy industry to see who is benefiting the most in the industry.” 

The information gained at the ACCC forums around Australia and information from supermarkets and processors will be used to develop a report which is set to be handed down to the Federal Treasurer in October. 

“The ACCC cannot change legislation but we can give the most detailed information possible to the Federal government,” Mr Keogh added. 

Farmers travelled from as far as Nowra, Tamworth and the Hunter Valley to attend the ACCC forum into milk pricing. Parmalat supplier and South Coast dairy farmer Tim Cochrane said his motivation for travelling five and a half hours was to show numbers and for a chance to tell the ACCC his fears for the Australian dairy industry.

“The impact of the $1 milk from supermarkets is still affecting my family’s business years on,” said the fifth-generation dairy farmer. 

Tim said on the South Coast he knows of family farms being sold and entire histories lost due to the lack of the foresight of the industry. 

"We are losing the identity of family farms,” he said. 

“The decisions are being made at a corporate level for short term gains, whereas we, in our business look ahead at generations. We look at our own kids and want them to have what we do.” 

Norco supplier and Oxley Island farmer James Neal said building a successful dairy farm and business takes time. 

“People don’t realise the hours, and how low the returns can be,” he said. 

“The only option for young farmers is to inherit their family’s farm – others cannot just start up anymore because the margins are so low.

“Unless farmers regain power in the industry, because that’s it we have no market power, there won’t be family-owned farms in the future. Future generations will look for other work if our businesses cannot be profitable and sustainable.” 

Industry body NSW Farmers put forward the idea of following in Ireland’s footsteps and introducing a new price reporting system that’s fairer for farmers.

Annual retrospective price reporting takes the mystery out of the supply chain, and improves the business relationship between companies and farmers, it argued. Chief executive officer Matt Brand said the Taree meeting was a good start in helping to lift the lid on the frustrations the dairy sector had been living with for a long time.

Just how unnecessarily complex the pay system dairy farmers operated under was made very clear at the forum, he said.

He pointed out $1-a-litre milk had not driven milk consumption as retailers had touted when it was brought in.

That, and many other retailer policies, such as those relating to out-of-stock and shelving practices, needed to be closely looked at by the ACCC, he said.

Wingham producer Peter Brown, who milks 220 mostly Holsteins to send 1.7 million litres to Murray Goulburn per annum, thinks the Irish model has potential. He runs his farm with son David, who represents the sixth generation of Browns in dairying. But the two now have plans in place to exit the industry.

“The milk price is below what it costs us to produce and you simply can’t keep going forever losing money,” Mr Brown said.

Most producers had faith the ACCC inquiry was worthwhile and were particularly happy agriculture commissioner Mick Keogh was at the helm, whom they said had a good comprehension of the inequities they were dealing with. Whether the political will would be there to act on ACCC recommendations stemming from the inquiry was another question, they said.