Spilt Milk

I don’t like to get on my soapbox often – I’m not an overly opinionated person, especially about topics which I’m not an expert in (i.e. none!) I don’t know much about much, but the past few weeks I have sat and read and watched and seen firsthand the dairy industry crisis unfold around me in our part of the world, dairy country. I thought I should tap some words out on the issue, then I thought I don’t know enough about it. Then I thought about why I blog, it gives me a voice, even if it’s not an overly informed one or opinionated, I should use it. So here goes…

Our little community we call home is a bit of an anomaly in the heart of Gippsland, in that it is a niche agricultural area – potatoes are our game. Everywhere around us the rolling green hills and fertile flats are full of dairy herds. Gippsland is dairy country, plain and simple, we make milk, cheese, butter, yogurt, to feed Australia and the world. Most of my childhood friends are off dairy farms, before potatoes my grandparents milked, Matt grew up milking in West Gippsland. And now, although we aren’t directly ‘on farm’ anymore, working in agriculture in Gippsland we can not avoid being surrounded by the dairy industry. Although I don’t know a whole lot about dairying, the Australian agriculture industry still pays our bills and (quite literally) puts food on our table. I am a farmers wife and farmers daughter, involved in and passionate about Australian agriculture, those things don’t change.

For those who don’t understand how dairying works, on a very basic level the farmer sells his milk to a processor: Murray Goulburn and Fonterra are two of the major players. The processors set the milk price (which is a bit of a complex scenario in itself that I don’t even try to understand), but I can relate on a produce industry level in that my family as potato farmers are at the mercy of bigger fish higher up the food chain also. Such is life in horticulture. In any other industry this might seem ludicrous – to farmers, it’s the way things are. Cows need to be milked, potatoes need to be harvested. The price is set, and you work your tail off producing that food and fibre, often for little financial gain, sometimes for a lot. The variables in farming are quite unique, unlike other industries where prices are set, quantities are known and you aren’t at the mercy of Mother Nature. At times there are very erratic seasonal and market conditions, there are boom years and there are bust years. It can be a rollercoaster of emotions and finances as you hope like hell for a boom year, in order to get you through a bust year, which you know will eventually come your way. A middle man such as a milk processor in the case of dairy, or a large wholesale distributor in our case with potatoes, is often a necessity – it’s an entirely different ball game and skill set dealing directly with supermarkets, a headache a lot of farmers don’t need, want, or have the time, patience or money for.

I digress…on April 27th Murray Goulburn announced the crushing blow that it would be dropping it’s milk price, from $5.60 to somewhere between $4.75-$5.00. The milk price as it was sitting was not exactly lucrative farming. But not only were MG dropping it, this was retrospective – effectively they had overpaid their suppliers, and now with their massively dropping profits and share price they needed the money back. Bugger. This is a really hard concept to get your head around, or an infuriating one at the very least! Imagine being paid for a service or product (sometimes worth hundreds of thousands of dollars) and then 6 or 12 months later a customer coming back to you and asking for all that money back. Imagine going to work every day for a year, then at the end of the financial year your boss tells you it was all for nothing, you’ll need to pay all your wages back. And you can’t disagree, you have to pay. The average dairy farmer in our neck of the woods will be owing MG $120,000. Simply unsustainable to a lot, if not most, farm businesses. This is what most dairy farmers around us are facing, all the while milking their herds and feeding hungry cows to produce milk which will inevitably be worth less than what it costs to produce. Ludicrous. Getting up at 4am in the bitter Gippsland cold, putting in monstrous hours for absolutely no financial gain for your family – this is the reality for dairy farmers currently.

Farming I know is so much more than simply a job – any primary producer, be they dairy or horticulture or cropping or livestock, will tell you that. It is a vocation, a way of life and something which beats deep within the veins of a lot of Australians, us included. A lot of farmers will tell you of the deep rooted stewardship they feel over their land and their animals. Any other business model, if you looked at it on paper in black and white, will perhaps tell you to walk away. For a lot, that will happen. For a lot, that’s not an option. The stakes are high. I don’t know much about the dairy industry, but I do know every single farming operation is very different, no two will be facing the same predicaments due to a whole lot of variables. There are big fish and little fish, small family farms, larger bigger players and somewhere in the middle. Some farmers will be prepared for this, most won’t be. The kick in the guts in South Gippsland where we live is that we’ve just endured an incredibly dry summer – the driest in my lifetime. Most South Gippy dairy farmers are paying through the nose to keep their cows producing milk – fodder over the summer has put a lot of people into a lot of debt. Debt on top of debt sends farmers to the wall, no doubt about that. Another kick in the guts is the current price of cows – a lot of people will be de-stocking, and at the moment dairy cows are not worth that much. If you sell your herd at the moment for $900 a beast, in six months time that might be more like $1400. You do the maths and quickly realise timing in the market is crucial to sinking or swimming. Some people have suggested why don’t the farmers just sell their milk elsewhere? It’s really not that simple. Most processors are not taking on more suppliers at this time, especially now. Processing milk costs a lot of money, obviously money that dairy farmers don’t have. There is no simple solution in who to sell milk to, at a fair and reasonable rate.

So, what to do as a dairy consumer? I’m sure a lot of you have seen on mainstream media, on Facebook, on blogs and Instagram posts, about buying branded dairy products. Devondale products are from Murray Goulburn producers – buying them means that Murray Goulburn will make more of a profit, those profits (you would hope) will be in turn passed on to MG suppliers. In this day and age of farmers markets this and local roadside stall that, it’s all very well and good – but that’s not the only solution. Australian agriculture is not sustained on farm gate sales, this we know. Our potatoes, thousands of tonnes per year, are not going to be sold anytime soon at our farm gate. It’s simply not the way medium to large scale agriculture works, or is ever going to work. Dairying, cropping, other horticulture industries are similar – we will always be selling to supermarkets, large scale wholesalers and in the case of dairy products, export is their huge market. So by all means, support small local guys where you can, but also keep putting those big brands in your supermarket trolley. People often ask me how to support our Thorpdale potato growers – it’s pretty simple really, buy potatoes. Promote potatoes. Eat potatoes. Most of our potatoes will be found in your local Woolworths, Coles and Aldi. Go and buy them. The same can be said for dairy products.

For more succinct info on the dairy crisis, you can read Milk Maid Marian’s thoughts (as a Fonterra supplier herself) or the ABC Landline story is also a good starting point. I’m glad to see mainstream media such as The Project shine a light on the issue also, in a succinct way that I think average everyday Australian’s resonate with, which is really important. I fear though, that it is all too little, too late. When Coles started offering $1/litre milk ages ago, there was a small call to arms to boycott, feet were stamped and people declared they wouldn’t buy it…but obviously it didn’t work, a little bit of noise but not enough action. Now, the general public is up in arms about the dairy crisis – but is it all too late? I really hope not, but know that for a lot of dairy farmers around us (like Farmer Adam, our friends brother) it was the last nail in the coffin. He is one of many, I’m sure.

Ultimately, I really hope this current chapter in Australian agriculture serves as a wake up call to the general public, but also to the industry itself. If not now, then when, will massive change occur to create stability in our markets? I’m not sure what that change needs to be or mean, but I’m hoping that this crisis opens doors instead of closing them, leads to opportunity and open discussions rather than closed minds and family ruin.

Amongst all of the discussion, I fear most for dairy farmers around us and their mental health. I’ve already heard horror stories of MG tanker drivers finding farmers with shotguns next to them in the dairy of a morning, of wives hiding the keys to the gun safe, of worry and angst far and beyond mere money matters and milk cheques. There is of course support offered, organistations such as Beyond Blue have stepped forward to highlight the dairy industry crisis, but at the end of the day a call to Lifeline or Beyond Blue simply isn’t going to pay a huge fodder debt or farm mortgage or pay back the money ‘owed’ to milk processors.

Simple as that.

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Any locals who are interested in learning more, being part of the conversation and hearing straight from Gippsland dairy farmers themselves, the Warragul Farmers Market is hosting a dairy farmer panel discussion this Saturday May 22nd at 10.30am out the front of the West Gippsland Arts Centre’s Fountain Room, within the market space.