The Morrison Government needs a plan for a profitable dairy sector following the news today that dairy giant Saputo will take 400 million litres of milk less per year from Australian farmers, than it normally would.

“We have had an extended drought which affects milk production, but there have also been ongoing problems with profitability for Australian dairy farms, especially in Northern New South Wales and Queensland,” said Shadow Minister for Agriculture and Resources, Joel Fitzgibbon.

The ACCC’s marathon 2018 Dairy Inquiry dragged the Government to a Mandatory Dairy Code of Conduct, but it failed to consider a minimum farm-gate price for milk during its inquiry.

“The dairy sector has been caught in a cost-price squeeze where dairy farmers’ costs almost match the price they receive for their fresh milk. This is the issue the Government needs to help resolve.”

The question of using minimum farm-gate prices to ensure a profitable dairy sector was referred to a Senate committee in October, tasking the Committee to look at ‘the merits of tasking the ACCC to investigate how it can regulate the price of milk per litre paid by processors to dairy farmers to ensure a viable dairy industry’.

“The dairy industry suffers from structural flaws and those flaws require serious policy responses.”