A decade on from the deregulation of the $12 billion dairy industry, the removal of government-mandated farm gate prices and subsequent consolidation have failed to deliver many of the promised benefits for farmers, processors or consumers.
According to The Australian Financial Review, opening farm gate milk prices for 2009/2010 have fallen to levels not seen for five years, 40 per cent below levels two years earlier, significantly shaking the confidence of dairy farmers in Victoria, Tasmania and South Australia.
Yet consumers are still paying high prices, particularly for branded milk, despite the removal last February of an 11¢ a litre adjustment levy.
Over the last two years, branded milk prices have risen by 18 per cent and house brand milk prices by 5 per cent, according to Dairy Australia.
"Clearly the farmers should be getting more money for their milk," says Stephen O'Rourke, managing director of Murray Goulburn Co-op, Australia's largest dairy processor.
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