Cattlemen milked dry by rising prices
TWEED dairy farmers are be- coming extinct as the cost of all things looks set to milk them dry and send the price of dairy pro- ducts skyrocketing. Cafes, restaurants and other food retailers across the Tweed received a letter last month from Fonterra, the sales and market- ing agent for NORCO products, advising that prices of dairy pro- ducts were set to soar again. "Expect to pay much more as crops fail and the water alloca- tions dry up," the letter, dated September 20, from Fonterra said. With farmers to receive more than a 30 per cent price rise for their milk in January consumers can only brace themselves for the shelf price of dairy products. But the question is where does the money go? Murwillumbah dairy farmer Corey Crosthwaite said the farm- ers certainly weren't getting any benefit from the price hikes, with his production costs having% doubled in the last 18 months. Mr Crosthwaite is one of nine dairy farmers left on the Tweed after another farmer walked off his farm last week. "In 2000 there were 50 dairy farmers on the Tweed, but follow- ing deregulation the numbers plummeted, matching the dwindling price farmers then% received for their milk. "Before deregulation we re- ceived 52 cents per litre. After de- regulation it dropped to 22 cents a litre," Mr Crosthwaite said. --------------- --------------- Farming production costs have doubled in the past 18 months, and for most of that time the farmers have received 35 cents per litre with a jump to 40.5 cents per litre since October 1 and 52 cents per litre expected in January, 2008. "We're back at the same price per litre for 2000, but when you look at our current production costs, we are so far behind," Mr Crosthwaite said. In 2000 grain was costing $70 a tonne, now it's $500 tonne, fertil- iser was $220 a tonne, it's now more than $700 a tonne, while fuel has gone from 60 cents a litre to $1.40 farm-delivered. --------------- --------------- Mr Crosthwaite is considering calling it a day, unable to sustain his 170 milking cows, 340 cows all up, on his 300 acres just outside Murwillumbah. "I get so worked up by it all. I've spent all my life on the farm, my grandfather and his grandfather worked the farm," he said. The Fonterra letter points the finger at the drought and oil% prices as the catalysts to send the prices soaring. "It's called agflation, and it's coming very soon, propelled by climate change and drought. Grain prices have hit record% levels, and those prices will% ramify through the food chain - --------------- --------------- dairy, pork, eggs and chicken and reach consumers," the letter says, quoting the Weekend Aus- tralian (September 15-16, 2007). "Australian dairy farmers policy director Robert Poole says agriculture is going through its most profound change in modern history. "The whole oil price, climate change, food-for-fuel scenario - that has changed the world for-% ever," Mr Poole said. "There is no relief....it is inevit- able at this time that movements in price for staples such as eggs, meat, bread and milk will occur relatively frequently," the letter said.