Milk price shock cuts to hit hard for Tasmanian dairy farmers reeling from big dry

SOME Tasmanian dairy farmers will have their income slashed by up to three quarters after the shock announcements of cuts to the supplier milk price.

SOME Tasmanian dairy farmers will have their income slashed by up to three quarters after the shock announcements of cuts to the supplier milk price.

Dairy farmer Steve Goldsack, from Glengarry in the state’s North, said his milk income for May and June from 250 cows would be slashed by $30,000 after Tasmania’s largest milk processor Fonterra, who he supplies, announced it would cut its farmgate milk price.

It came a week after Victorian-based co-operative Murray Golburn also cut its milk price.

“Without the cut I would have got $40,000 but now I will only get $10,000. So I will stop spending,” Mr Goldsack said.

“I have done a new budget — it’s going to be tight but its doable.”

Dave Jones, a dairy farmer from Hamilton in the Central Highlands said the milk cuts would decimate the industry.

“The price cut is unfair and will hurt many people,” Mr Jones said.

Fonterra Australia revised its farmgate price for the full 2015-2016 season from $5.60 a kilo of milk solids to $5/kg. This follows MG, the largest dairy processing co-operative in Australia, dropping its milk solids price from $5.60 to between $4.75 and $5.

With 440 dairy farms, the industry is worth about $440 million to Tasmania. About 250 farms supply Fonterra.

Dairy farmers have copped a tough year dealing with the extreme dry, making fodder hard to get causing further increases in cost of production.

At Agfest Tasmanian Farmers and Graziers president Wayne Johnston said the ripple effect of the cuts would be felt throughout the community for possibly the next four years.

“Everyone will be effected, especially service providers. Some rural areas will shut up shop,” Mr Johnston said.

TFGA chief executive Peter Skillern said the cuts came on the back of a historically difficult season.

“This is blow Tasmanian dairy farmers did not need,” Mr Skillern said.

Primary Industries and Water Minister Jeremy Rockliff said at Agfest yesterday the Government would work alongside farmers.

“It comes on the back of one of the most challenging seasons in generations,” Mr Rockliff said.

“This is a significant price drop, but volitality in the dairy industry has always been there. We hope prices will recover soon.”