It has been a challenging year for dairy farmers across the Northern Rivers.
It has been a challenging year for dairy farmers across the Northern Rivers. Marc Stapelberg

$1 milk contributes to 'worst year' for dairy farmers

A STATE Government report has found what dairy farmers have been saying for a long time - dairy farmers are struggling.

The Legislative Council's Industry and Transport Committee recently handed down its report into the sustainability of the dairy industry in NSW.

The committee found 2017-18 was the worst year for net farm income in NSW since 2011-12, and it does not look to be getting any easier for farmers.

Other findings included:

  • The retail price of $1 per litre for drinking milk has impacted the industry
  • There was a power imbalance between farmers and processors
  • The farm-gate price for raw milk does not allow a reasonable profit margin.

The results came as Minister for Primary Industries Niall Blair met with a number of dairy farmers in Lismore on Monday as he began a tour of dairy operations along the North Coast.

"There is no one issue for the sector - the drought, increasing costs, low milk prices and the supply chain are all very challenging for the industry," Mr Blair said.

"The industry's value to our state cannot be underestimated; with more than 650 dairy farms in NSW powering an industry with an economic output of more than $600 million in the past financial year."

Norco chairman and acting chief executive, Greg McNamara, welcomed the minister's visit, saying Norco farmers had met with the minister to discuss their concerns.

"Obviously we're concerned about the sustainability of the dairy industry, especially through times of drought and severe weather events, and we are doing all we can to help our farmers," Mr McNamara said.

So much so the dairy processor lifted the farm-gate price paid to its farmers by five cents a litre throughout the September-November period.

"As a result of that pricing arrangement, and with the support of our customers, we've put $2.7 million back into our farmer's hands."

The NSW Government will consider the recommendations made by the committee before delivering a response in the New Year.