Deregulation pain hits dairyfarmers

22 Nov, 2000 03:18 PM

DAIRY deregulation is not the reason Busselton dairy farmers John and Margret Teale are leaving the dairy industry ‹ rather it is the reason they can't leave. They could leave simply by walking off the land that has been in the Teale family since 1927 or accept half the $3 million they believe their land is worth. "To walk away and say we are only going to take half at this stage would be foolish as we need the money to pay the debt off the farm," Margret said The Teales had no option but to put their dairy farm on the market after a family partnership fell apart in 1998, a time when deregulation clouds were starting to loom on the horizon. However, when "the offer" came it was just a smidgen too late. "A buyer was set to sign but backed off when deregulation became a reality instead of a threat," Margret said. "We were looking at alternatives but it's the deregulation preventing us from leaving." She said they had six interested buyers but all had to sell their own land first. "Their land has been on the market for ages, too," she said. Margret said that, before July 1, banks were refusing to lend money to people wanting to buy the property. John was able to continue milking on his own with help of itinerant workers after the partnership fell apart but couldn't afford his worker after deregulation, when milk prices slumped. He has since been running the farm and milking the 190 Holstein cows on his own. "If I was 20 years younger I would try to ride this through," he said. The Teale's milk prices paid by the Capel Dairy Company for September were14 cents a litre and 17c/L, with these prices so low there will be no grain fed to the Teale's cows this summer. The average farmgate milk price before deregulation was 28c/L when Capel was receiving top-ups to its manufacturing prices. John's strategy now is to milk once a day and reduce the milking herd to a more manageable size of 100 cows. He said the property had the capacity to milk 400 cows. If prices didn't improve, he would stop milking altogether and run all beef, although he said this was not a favoured option. "The beef industry is where I left it 20 years ago," he said. "But the end of our dairying will depend on prices." While it was not deregulation that led the Teales to put their farm on the market, they were angry about its introduction, not least the effect it has since had on their situation since July. Before deregulation, they had a quota of 1045L. Margret said the $256,000 gross they will receive in the next eight years was "to compensate for taking away an asset that turned over much more than that amount each year and for devaluing farming land and making dairy farms worthless". They believe if they had taken the money as a lump sum amount, they would have been only able to pay off debt remaining on the land and leave them with no income. "We will find a way around our problems as we always have in the past, however it does make us very bitter and cynical toward anything the Government does or promises," she said.


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