A NORTHERN Rivers farmer says if the dairy industry continues to decline it could force the widespread importation of New Zealand milk.
Peter Graham, a fifth generation farmer from Codrington, says supermarket milk prices as low as $1 per litre are killing the profit margins and business prospects of dairy farmers.
"The way the economics are today, $1 is what the farmers have to get (to profit)," he said.
Mr Graham said over-exportation and a mountain of farm closures over the past two decades have also contributed to industry decline, which has triggered local milk shortages similar to those in Queensland and Western Australia.
"We need a return. There are no dairy farmers getting a return. No dairy farmer on the North Coast or Queensland or anywhere from north of Nowra. There is not a dairy farmer that is saying they are making good money," he said.
"With drought impeding on us and El Nino coming back in there's going to be a large shortage leading into Christmas. Not because of Christmas, but leading into a dryer period there's going to be a lot worse shortage than there is now.
"If we want to grow the dairy market (in) China, Asia, wherever, how are we going to sustain local product when farmers are held back by the dollar a litre campaign?"
Mr Graham was at a loss to say how shortages of milk in the Queensland and WA markets could be addressed in the current climate for dairy farmers.
"You feel it everyday. There's a demand there for growth in our industry with exports to China now and securing milk markets to retail sectors, like Coles and Woolies," he said.
"If things keep getting worse you could see an imported white milk from New Zealand. That's not a bad thing, but it's not the right thing."
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