Crisis milks profits
Speaking on his mobile phone on the way back from International Dairy Week, held in Shepparton, Victoria, Mr Graham said he was worried about the effects of the world financial crisis on the dairy industry.
Mr Graham said worldwide demand for butter and milk powder products had dropped dramatically and this had already begun to affect the Victorian dairy industry, which exports about 90 per cent of its produce.
As a result, Victorian dairy farmers had taken a price drop of up to 40 per cent, or 20 cents a litre for their milk, he said.
Mr Graham said this would have a flow-on effect for dairy farmers in Northern NSW because dairy processors will be looking to the domestic market to sell their surplus.
“A percentage of that milk will end up on the domestic market,” he.
According to Mr Graham, that could drive down the domestic milk price.
Currently, Lismore-based Norco pays farmers an average price of 54 cents a litre. However, some farmers get more than 56 cents due to higher butterfat and protein levels.
Locally, dairy farmers have only just caught up from last year’s input cost blow-out.
Towards the end of last year, fuel and fertiliser costs soared and many farmers struggled to stay afloat.
But this month brought some relief, with reduced demand for diesel and fertilisers in India and China seeing Australian dairying costs fall.
Mr Graham said that some of the biggest diary processors internationally had lost large sums of money due to the world financial crisis, and the industry was facing some real challenges this year.