The Western Australian Farmers Federation says dairy farmers need to receive at least 42.5 cents per litre for milk for the industry to be sustainable in WA.
WAFarmers’ Dairy Section Council and the Collective Bargaining Group of WA today released a report into sustainable milk pricing, which showed current farmgate milk prices were not sustainable.
At 42.5 cents, dairy farmers would break even, the report said.
According to the report, many dairies in Western Australia received farmgate prices as low as 39 cents per litre in 2012.
WA Farmers Dairy Section president Phil Depiazzi said there were no surprises in the report, which will now be taken to major processors Browns, Harvey Fresh and Lion, and major supermarkets Coles, IGA and Woolworths.
“There is not enough return on asset to encourage new entrants into the industry and not enough return on capital for current dairy farmers to invest in their infrastructure,” Mr Depiazzi said.
“Dairy farmers need an increase to farmgate milk prices to create a viable return on asset, which will lead to a sustainable Western Australian dairy industry.”
Mr Depiazzi said the report would ensure processors and supermarkets were fully aware of the effect their pricing policies had on WA farmers.