THIS year has been one of the most difficult on record for dairy farmers in Western Australia due to declining domestic milk prices, lower international commodity prices, a high Australian dollar, higher feed costs and the impact of SARS.
There are now fewer than 300 dairy farmers in WA, 25 per cent down on farmer numbers before deregulation in 2000.
Producers are struggling to survive on prices that range from 23 to 31 cents a litre, after deregulation caused the premium for the liquid milk sector to drop from 24c/Lto 10c/L.
Dairy farmers across Australia now operate in a completely deregulated environment, with international prices the major factor in determining price.
According to Dairy Australia figures, Australian dairy farmers receive a low price by world standards with an approximate average of US15c/L for milk.
However, the good news is that dairy exports from WA have grown in value by almost 50 per cent since deregulation in 2000.
Further, last year WA milk production fell by 5 per cent compared with a national decline, on average, of 10 per cent.
Agriculture Minister Kim Chance said the outlook for the industry was positive, with the end of the drought leading to a fall in feed costs, while the $200 million joint venture between Challenge Dairy and the Sanyuan food company in China would bring many benefits.
“Western Australian dairy farmers are paid a smaller share of the retail price than farmers in other States, possibly because there is less competition in the market,” Mr Chance said.
“This year they have been doing it tough, with falling prices at home and abroad, a rising Australian dollar and high feed costs.
“Now that there are signs that things are improving, we want to be sure that producers are the first to benefit.”
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