Pat Neal doesn't think the 10 cents a litre price hike on Woolworths budget milk will reach the bank accounts of dairy farmers.
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The Oxley Island dairy farmer will not benefit from the February 19 decision to remove "$1 per litre fresh milk by increasing the price on all two-litre and three-litre varieties of Woolworths branded fresh milk." Money from the price hike is reportedly guaranteed to go to around 450 dairy farmers who supply Woolworths fresh branded milk nationally.
Milk from Pat's 400 cows is sold by Coles in Norco products, and as of February 21, Coles will not match the Woolworths' pricing change on house brand milk.
"I don't think farmers will get the full 10 cents. There will administration costs and blah, blah, blah ... but price is an issue we need to talk about," Pat said.
Deeper Reading:
"If farmers could get another 10 to 15 cents a litre that would go a long way towards helping them to make the decision as to whether they should stay or go from their farms, that extra money could make it sustainable."
Pat wants the public and politicians to pay attention to price, to recognise the real cost of milk production and to think longer term.
This year Pat's farm will break even, he will not make a profit, and says it was only rain in September and October last year that prevented a $200,000 loss buying hay.
It's long days and hard work to make no money.
"It's probably not that which is getting me down at the moment, it's the fact that 18 years is a long time to have pretty much the same price for milk,'' he said.
"Petrol was probably under a dollar a litre in that time ... fuel prices, electricity prices have all got that creep of five to 10 per cent a year, the costs just keep going up."
At the moment, Pat gets paid $0.49 cents a litre for milk, and it's a price that he says hasn't changed much for almost two decades.
He is a fifth-generation dairy farmer and his experience and passion for the industry is driving a 20-year-plan for his farm even as "it's been bloody hard in the last 12 months."
Pat shares the reality of increasing costs and no change in price for 20 years, "25 per cent of Australia's milk has just gone."
Probably 20 years ago Australia was producing around 13 billion litres of milk a year, now farmers are doing just under nine billion, so 25 per cent of Australia's milk has just gone.
- Pat Neal
"The question has to be asked of the Australian government, do they want food security? It's a bigger question now.
"The worry for me, and I'm thinking down the track, but if the neighbours go and the people at Wingham go, how viable will it be for a factory to process the milk from my farm? I can't afford to build a factory to bottle milk.
"It doesn't cause me sleepless nights but there's going to have to be decisions made and there is a critical size for the industry to be able to maintain a factory."
In addition to a 10 to 15 cent a litre price increase, Pat says most farmers want to "see a milk price index to show where the money goes in the supply chain."
Pat says Woolworths and Coles milk pricing is not the sole contributing factor to the declining viability of the industry, adding that "to Coles credit I received about $5500 from the Coles Dairy Drought Relief Fund."
"I've been thinking about this today because I'm sitting in a tractor - Coles and Woolworths - their business is selling produce to consumers and it doesn't matter where the food comes from, Australia, New Zealand, Great Britain, or America, they will still sell food and toilet paper, whatever, and that's not going to change.
"It's time to think about where we want our milk to come from in the future.
"I plant trees on my farm in specific areas because I have a 20-year plan to be a farmer on my farm. I do things to be sustainable because I know I will be here in 20 years ... hopefully."
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