Dairy farmer Leonie Paish
Dairy farmer Leonie Paish Christopher Chan GLA020213BOYN

Dairy’s in dire straights says Boyne Valley farmer

"DIRE" is how Boyne Valley farmer Leonie Paish describes central Queensland's dairy industry.

And the latest shift in the supermarket price war isn't helping.

"Farmers at the moment are not making ends meet," Mrs Paish said.

"Our costs have spiralled out of control. Everything has increased - power, fertiliser, seeds, wages, every input."

The milk price war between Woolworths and Coles began in January 2011, with both companies selling their inhouse-label milk at $1 a litre.

Queensland Dairyfarmers Organisation president Brian Tessmann said the consequence had been lower farm-gate prices for farmers.

"Branded sales are how each (milk) company makes their money," he said.

"The super low price for the supermarket milk takes sales (away from farmers) and makes them reduce the price of branded products."

Ms Paish said her family's property Velvet Waters, still recovering from recent floods, was hit by a severe price cut in January.

"It has dropped our farm-gate price 6c a litre. That will be over $60,000 a year (loss) on our income," she said.

"Our business is not really viable at that return."

Velvet Waters supplies milk to Parmalat, which owns Paul's Milk, and is the only major processor in the region.

Coles this week announced deals with co-operatives Murray Goulburn and Norco, to pay a premium price on milk supplied for its private label products, ditching Lion Co.

Mr Tessmann said for central Queensland, this would have little impact.

"The positives are it is taking (contracts) to a higher price than before," he said.

"I think they're trying to convince politicians that they are sorting it out."

Woolworths is trialling a deal with a group of farms in Manning Valley, New South Wales for a range of new milk products, which it says seeks to give dairy farmers a better deal for their milk.

But farmers are yet to see any benefit - Ms Paish said she knew of three farms that had gone out of business this year due to the low returns, and one to the floods.

"Probably in June there will be more farmers going out," she said.

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