WA dairy farmers dropping like flies amid soaring costs and supermarket prices ‘racing to the bottom’

WA dairy farmers desperately want the price of milk to rise to save their industry from suffering a slow and torturous death. Farmers have been getting “screwed” for way too long and politicians need to “wake up” to how extreme costs and tiny farm gate prices have forced hundreds of dairies to shut, according to fourth generation farmer Michael Partridge. “There is no alternative,” he said. Without local dairy farmers, West Australians would simply have no milk full stop, because shipping it in from the Eastern States or overseas would not be viable, he said. WA recently fell to just 99 dairy producers, down from 400 five years ago, as soaring production costs and low sale prices continue to present an abysmal reward for effort. Mr Partridge shared the horror of seeing profits of his farm in Benger, 150km south of Perth, erode — even after processors offered a slight price rise. “We had a small increase of 2¢ at the beginning of this financial year, but the costs have gone up so dramatically,” he told The Sunday Times. “I’ve never known a time since I’ve been in business for a milk price rise to be eroded away by costs so quickly.” Not only had inflationary pressures meant an explosion in operating costs but retailers routinely played processors — lacking any real efficiency improvement in the last 20 years — off against each other, Mr Partridge said. “The rewards aren’t in the whole supply chain and they should be. We’re the weakest link at the end of this supply chain, so we’re the ones who get screwed.” He firmly advocates for prices paid by processors to at least be lifted to match NSW’s 85¢ a litre, which is only 10¢ more than WA’s 75¢ but would have a significant impact. “All the processors understand that the WA farmers are the least profitable in the country and they know that we’re getting paid the least for the same job,” Mr Partridge said. “The WA dairy industry is the most isolated dairy industry in the world, producing fresh milk every day for the most isolated city in the world, Perth. “Fresh food security should be on the agenda of the State Government. They need to understand what’s going on.” He added how mounting costs and little hope of price increases didn’t paint an optimistic picture for younger generations to follow in the footsteps of their parents, arguing, “we want the best people in the industry, but the best people are attracted elsewhere”. WAFarmers dairy president Ian Noakes agreed the conditions facing farmers were “totally unfair”. “At the moment it’s just a race to the bottom as far as I’m concerned. I don’t understand why dairy farmers have been singled out to take this punishment,” Mr Noakes said. While milk prices have lifted slightly in recent years, meaningful flow-on effects haven’t been felt because operation costs have skyrocketed, and in many cases doubled in just a few years. “In three years, we’ve had a 2¢ litre increase in price. But costs have gone up significantly more than that,” Mr Noakes said. “We’re losing farmers all the time. Milk production has been going down across the years, and I just think milk pricing is basically not sustainable for the long term future of the dairy industry in WA.” A longtime point of suffering for farmers was supermarkets’ introduction of $1 milk in 2011. The infamous “dollar milk wars” ended in 2019 following widespread backlash from farmers, many of which were ultimately forced out of business. For the farmers who have committed to “riding out” the slump, it was a matter of having strong contracts and efficient processes, Mr Noakes said. “There’s families that have made pretty significant investments in milking sheds, or whether it’s rotary dairies or robotics, and they’re staying in it, they’ll ride out. “They see that, you know, ‘if I ride out the lows, then I’ll come good’.” For many, their survival hinges on simultaneously farming beef, which is more profitable than dairy. “There’s certainly been a significant push by dairy farmers moving to beef and trying to find an avenue of making money there,” Mr Noakes said. “I could confidently say 10 to 25 per cent of a dairy farmer’s income, depending on their individual situation, will be cattle sales.” Some had turfed dairy entirely to focus just on beef, he added. “I think most farmers that have left the industry haven’t left farming, they’ve just gone from milking cows to running both, and I see quite a few dairy farmers with young Angus females, so hedging their bets, almost if the dairy doesn’t come good, they’ll milk less less cows and run some beef,” Mr Noakes aid. Other “fed up” families, often with no young people keen to continue with the family business, were deciding to throw in the towel entirely. “You’ve got some who are investing and some who are getting out.” Headwinds from all directions were lashing those choosing to stay, Mr Noakes said. “Australia is an expensive place to do business now, and it never used to be like this, but all the costs are high. “We have this vibrant mining industry, so all the wages are higher, all the tradesmen that you use - electricians, plumbers, refrigeration mechanics - they’re all competing, so they have to pay significantly more wages to keep their business operating, so the costs get passed on to the farmer. “Our electricity costs have gone up 35 plus per cent in the last year which is significant, and we use a lot of tradesmen, and even the factories are under pressure to manufacture the product and they face the same headwinds.” Multiplying costs come at a time when retailers are seemingly in a “race to the bottom” with prices offered to consumers. “Everybody wants to jump in and sell milk at a discount, even all the farmers markets. They all want to give milk away, so it’s hard to make money out of that.” Dairy industry consultant Steve Hossen described extreme cost increases across all areas of dairy farm operations and referenced insurance for a client that had increased by $43,000 in a matter of just five years. “It’s not just one area to blame, it’s accumulative across the board. We are in a difficult situation, it’s a high cost game,” Mr Hossen said. Similarly, to build a new dairy five years ago it would have cost $2 million, and to do the same in 2026 would cost more than $4 million. “There’s nothing wrong with the big things being expensive but you need to feel confident about the entire industry and about half the farmers aren’t,” Mr Hossen said. About five years ago farmers were paid 55¢ per litre of milk by processors in WA and while now it’s just over 15¢ more, extreme cost increases mean farmers haven’t felt the benefit. “That level of price increase for established quality farmers should mean there should be more money sitting in their pockets, but there’s not,” Mr Hossen said. In southeast parts of the country milk prices sit in the 80¢ per litre range, which Mr Hossen said would be more sustainable for WA farmers, while in Queensland it was $1. A spokesperson for Brownes — WA’s oldest dairy — said the company was “fighting” for milk to stay in South West paddocks, “not on long-haul trucks crossing the Nullarbor”. “Without support for the next generation, WA families lose local milk,” they said. “We’re at a demographic cliff. If we don’t make dairy a viable career now, we don’t just lose milk volume — we lose generations of expert knowledge. “To save our dairy farms from becoming housing estates, milk must be worth more than the land. Choosing Brownes helps farmers stay on the land and secures our local food supply.” Bega Group-owned Masters, a major WA milk processor, said it was “proud to continue to invest in its product portfolio”. “As a brand that sources enough locally supplied milk to fill around 23 Olympic‑sized swimming pools, it’s important that Masters has a diverse offering that brings new drinkers into the milk category,” a spokesperson said. “Masters Milk is proud to back local farmers, and ensure that West Aussies can keep enjoying locally produced milk the WA way.”

WA dairy farmers dropping like flies amid soaring costs and supermarket prices ‘racing to the bottom’

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