The Legislative Council Inquiry Sustainability of the dairy industry in New South Wales found the $1 retail price for milk has removed considerable value from the dairy chain, placing farmers under major financial pressure as production costs rise.

The inquiry found pricing is more to blame than the drought for the dairy farming crisis.

The Committee presented the NSW Government with 10 recommendations to save the industry from dying.

Inquiry Chair Robert Brown, Shooters, Fishers and Farmers (SFF) MLC said, “It is now five minutes to midnight in the fight to save many New South Wales dairy farming”.  

“The number of dairies in New South Wales decreases every year as farming businesses are squeezed by processors and retailers intent on bolstering their own profits and market share.”

“This has resulted in farmers operating at ever slimmer margins year on year.”

“The committee is particularly concerned by the evidence of farmers who told the committee that they cannot draw even a modest wage for themselves from their farming businesses.”

$1 per litre milk was introduced by major retailers in 2011 through their private-label milk lines.

A number of farmers and experts presented evidence to the committee disputing an Australian Competition and Consumer Commission (ACCC) finding earlier this year that retail milk pricing had little impact on the price paid to farmers.

Colin Thompson, Vice Dairy Chair, NSW Farmers' Association, said of supermarket milk prices, “there is no question that if millions of dollars are taken out of the supply chain the loss will flow through to farmers”.

Trevor Middlebrook, Dairy Farmer, Gloucester, said the low retail milk price has caused a huge wealth transfer from rural areas to rich investors.

“There was not a single cry from the public that the milk was too dear. It was already discounted,” he said.

Helen Dalton, Binya farmer and SFF Murray spokeswoman, said, “there’s something majorly wrong in the world when milk is cheaper than bottled water in the supermarket”.

"We know someone is milking the industry for billions of dollars. Sadly, its not farmers". 

Among the Committee recommendations was that the Government expand mechanisms, such as the current 'drought levy' some retailers have on certain milk products, to ensure that the retail price of milk takes account of the ongoing increases in the cost of production.

The Committee also recommended the inquiry be re-opened after the March 2019 election.

The NSW Government is due to provide a response to the Committee’s recommendations and findings by 28 February 2019.

You can read the full report from the Committee here