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Low milk prices drain producers
25 Jun 2004
The average price of milk has risen only slightly in the four years since dairy industry deregulation as consumers have turned to home-brand products. While retail prices held steady, the returns for farmers fell almost 16 per cent to range from 32 cents to 36 cents a litre.
Despite the fall, a national survey of 3,658 dairy farmers released this week showed most were more worried about drought than deregulation - just 5 per cent mentioned it. Farmers displayed a surprising level of optimism: 40 per cent were positive about their future prospects.
Deregulation meant the returns of producers and processors were directly exposed to the consumer market. From July 1998 to July 2003, the average price of a two-litre bottle rose from just under $2.50 to just over $2.50, while average farm-gate prices fell from around $1 to about 65 cents. Home-brand milk has 60 per cent of the market and three-litre containers have become cheaper and more popular, while the prices of some other items have increased. Prices are not expected to change greatly over the next two years.
The Courier-Mail, 24/6/04.
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