Global markets key to milk prices

29 Jul, 2013 02:00 AM
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Harvey dairy farmer Dale Hanks agreed with Agriculture and Food Minister Ken Baston’s comments and said establishing international markets, particularly in Asia had the potential to lift domestic milk prices.
Harvey dairy farmer Dale Hanks agreed with Agriculture and Food Minister Ken Baston’s comments and said establishing international markets, particularly in Asia had the potential to lift domestic milk prices. "We are in a deregulated market now and the market forces have to prevail and that is all there is to it," Mr Hanks said.

AGRICULTURE and Food Minister Ken Baston has reiterated his stance that the WA milk industry needs to find international markets.

It is a pathway Mr Baston believes will lift farmgate prices for dairy farmers.

During a recent tour of the northern and western districts of the Wheatbelt, Mr Baston discussed the importance of establishing international markets in the dairy industry in order to place pressure on domestic pricing.

Mr Baston said a Department of Agriculture and Food pre-feasibility study, outlined investment opportunities in the WA dairy industry.

"The milk industry is right on the cusp of taking off," he said. "Demand from South East Asia has increased to 18 billion litres a year and to put that in perspective, that is the total milk production of New Zealand.

"They (South East Asia) said they can't get fresh milk and can only get powdered milk, so we need to think about those markets."

WAFarmers president Dale Park agreed with Mr Baston.

"He is right, our home markets, especially in WA, pays just above what farmers can receive in the export market," Mr Park said.

According to Mr Park, dairy farmers were receiving prices slightly above what the supermarkets and processors had to pay to stop milk from being exported.

"We have to find other places to send our produce so that there is more pressure on the home market so they pay us more," he said.

"We don't get paid anywhere near what they can pay in the home market, we only get paid what they have to pay.

"The international pressure comes from not having enough supply domestically."

Mr Park said there was currently not enough international pressure in the dairy industry.

"We have got dairy farmers saying that they are not going to produce enough milk because they can't do it profitably," he said.

"So you would think that would be concentrating the processers' minds a bit so they will pay them a bit more."

Mr Baston opened the WAFarmers dairy conference in Busselton earlier this year, where he had addressed questions from concerned producers regarding what he would do about the two major supermarkets and their continued control over milk prices.

When asked what he was going to do about Coles and Woolworths, Mr Baston said he would do "absolutely nothing".

"And the reason I am not going to do anything about that is because we need to go out and find the markets to put the pressure on those two retailers to pay more," he said.

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READER COMMENTS

farmed
29/07/2013 8:36:15 AM, on Farm Weekly

the dept of ag and foods pre feasibility study ito dairy is a joke. costings are done on milk farmgate price of 20-22c/L. get real people. why print fiction when you know it simply can not be done. this farmer feel good mentality will not do us dairyfarmers any good. yes, asia has huge potential at a price. but wa is not in a position to take advantage of it with its current cost of production. mining has crippled this state for anyone not involved in mining. a farmer cant pay some one $100,000 for just turning up making 2 hours work turn into 12.

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