Dairy farmers protest after shock cut in global dairy price by Fonterra, Murray Goulbourn

Danielle and Byron Carins run the two dairies in the North-East, with Byron’s brother Lester Carins and his parents John and Helen Carins.

On Wednesday, the couple, along with their family, were forced to let four employees go from the business as they struggle to keep from going further into debt as a result of the spiralling prices.

The family spent the morning on Thursday in Launceston’s Brisbane Street Mall to raise awareness of the situation among non-farmers and also to garner support for a petition to urge the government to review the pricing structure.

Last month, the world’s largest dairy processor Murray Goulburn announced it would be reducing its farmgate milk price from $5.60 per kilogram of milk solids (kgMS) to $4.75kgMS.

Last week Fonterra Australia announced it would be reducing its average cost from $5.60kgMS to $5. The farmgate milk price is set by global supply and demand and is regulated by the larger companies. It is the price the company is prepared to buy the milk solids for from the farmers.

Mr Carins said this reduction meant the farmgate milk price for May and June would be $1.91kgMS for the last two months of the season. 

In term of milk production, Mrs Carins said prior to April farmers were being paid 55c per litre of milk and with the reduction that would mean the May and June price would be 15c.

It costs at least an average of 30c per litre in production costs.

“Every day we have the cows out we are losing more money, we can’t produce milk for 15c a litre,” Mr Carins said.

“We had to let four guys go yesterday and we’ve had to dry all the cows off early. Some of the cows we’ve already sold to Greenhams.”

Fonterra managing director Judith Swales said the company had been up-front about the possibility of a reduction all year.

“We signalled in August 2015 the possibility of a step-down and that our farmers needed to budget conservatively,” Ms Swales said. 

“We recognise this does not make our milk price revision any easier on our farmers.

“We are working hard to get a clear line of sight for next season’s milk price so our farmers can plan.”