THE Western Australian Farmers Federation (WAFarmers) dairy section recently met to evaluate industry's options to prevent the continued slide in WA milk production.
Milk production in WA during 2000/01 was 18.5m litres less than in 1999/2000, a reduction of 4.5pc.
The WAFarmers dairy section president Tony Pratico said he expected a reduction in milk flow during the first year of deregulation but the continued reduction in 2001/02 was a concern to the industry's sustainability for both processors and producers.
"According to the Australian Dairy Corporation (ADC), as at the end of November 2001, milk production in WA was a further 10pc down on the same period in the previous year," Mr Pratico said.
"The WAFarmers dairy section is concerned that with the easing of world milk prices, returns to producers will come under increasing pressure, and this worrying trend will continue."
Mr Pratico said that with nearly 49pc of WA's milk production being sold domestically as bottled white milk and with the manufactured product mix, there was a need for the processors to reflect the fact that they were protected from world milk price fluctuation.
"Due to this product mix, processors in WA should be able to sustain a premium to the world market price," he said.
"This premium would encourage milk production expansion by dairy farmers and increase the viability of the processing sector in this state.
"Dairy products manufactured in WA are well received on the world market but if farmers do not see the return at the farm gate, they will not continue to invest in their industry.
"The number of dairy farmers in WA has reduced from 424 in June 2000 to 351 at February 2002. Those 351 who have remained have expanded but if they are going to make up for those who have exited the industry, they will need a price signal.
"The WAFarmers dairy section believes the WA milk consumer is willing to pay a premium to ensure they receive a WA fresh product," Mr Pratico said.