Every day Pat Neal of Oxley Island gets up early to milk his cows. He knows the price he will be paid per litre of milk, it won't change, no matter how much it costs him to get that one litre from the cow to Norco.
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Public awareness of the reality of dairy farming and impact of $1 house brand milk on farmers is growing, and is contributing to a shift in supermarket decisions on price; first it was Woolworths, leading the sector in its February 19 decision to remove "$1 per litre fresh milk by increasing the price on all two-litre and three-litre varieties of Woolworths branded fresh milk." One month later, Coles and Aldi have acted to do the same.
It's a win that won't help Pat's bank balance and he shares, "I always say, buy a branded label milk because in the end that takes some power away from the supermarket."
This week Pat learned of another win for dairy farmers, with Minister for Agriculture and Water Resources, David Littleproud announcing the government would create a Mandatory Dairy Code of Conduct that will ban retrospective price cuts to dairy farmers; ban mid-season price cuts except in exceptional circumstances; ban exclusive contracts which stop farmers selling their excess milk to another company; ban two tier pricing which allows processors to pay different amounts for milk supplied by the same farmer; and ban processors withholding "loyalty payments" if a farmer moves to another processor.
Pat welcomes the mandatory code of conduct and sees it as a first step in industry reform.
Anything that we can get to make payment for our milk fairer is a good thing.
- Pat Neal
"Anything that we can build on to give us more rights, and to lay out or rights, is a good thing," Pat said.
Pat hopes continuing public pressure builds momentum for widespread industry change, and on his 'wish list' as a next step is the ability for farmers to enter into supply agreements with processors that guarantee a price for the term of the agreement, be it two, three or five years.
"We get locked into supply agreements in which processors only give us prices for each financial year.
"It's not really a negotiation, it's a take it or leave it option. In June each year, they will tell you what you will get paid for the next 12 months. You don't know, you've just agreed to supply milk to someone without knowing what you're going to get paid for the second, third, fourth and fifth year.
"It does your head in, and you get quite stressed around June because you don't know what's happening.
"It would be great to be able to negotiate, especially in a year like this year, in which fodder costs because of the drought are so high, its added another 15 cents a litre to our production cost - it means there is no room to move, and we as the farmer are the people that have to absorb that cost."