Milk price okay: Coles | My Machinery
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Milk price okay: Coles

Milk discounting leader Coles insists farmers who rely heavily on the fresh domestic market for their incomes are not suffering lower farmgate prices because of the retailer’s $1 a litre pricing strategy. Expert analysis commissioned by the supermarket chain found average farmgate milk payments had been relatively stable in the market milk States of Queensland and NSW in the two years since Coles sent milk values diving by cutting house brand price to $1/litre. In fact, the research by fresh food sector analytical firm Freshlogic suggested farmer payments remained close to peaks achieved in the past five years. Coles said the research, using Dairy Australia data, also showed total fresh milk sales were up and the decade-long decline in dairy farmer numbers was slowing in NSW and Queensland. It conceded farmgate milk prices were set to fall in both States this year, but blamed dairy processors losing supply contracts and cutting their milk factory requirements in these States, not $1 milk retail pricing. Lower farmer margins were directly due to lower prices from dairy processors, drier seasonal conditions in spring and higher feed costs for dairy cattle. Freshlogic found milk production in NSW and Queensland lifted marginally and milk sales to consumers grew 1.4 per cent and by 5pc in the five months to November. “Coles has also entered into long term contracts that support local dairy processing including Malanda in Far North Queensland and Norco and Bega Cheese in NSW,” said managing director, Ian McLeod. He accepted dairy farmers were challenged by falling global milk prices, a high dollar and rising input costs, but argued Coles fully funded its cuts to generic milk prices (triggering a milk price war with its rivals) from its own profit margin last year. He said sustaining local dairy production was critical for Coles because its customers wanted fresh milk from Australian farms. “The Land” http://www.theland.com.au/news/nationalrural/agribusiness/general-news/milk-price-okay-coles/2644806.aspx

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