Australian Dairy Industry News

Written by: Duncan B. on 9 July 2024

Twenty Australian Manufacturing Workers Union maintenance workers employed at the Burnie (Tasmania) plant of Canadian-owned dairy processor Saputo have been on strike for a month.

They are seeking to be paid the same as Saputo employees doing the same job on the mainland, claiming they are receiving 21% less than their mainland colleagues. They have called for a boycott of Saputo products, which include the Cheer, Devondale, Cracker Barrel, Mersey Valley and several other brands of cheese.

The majority of the Australian dairy processing industry is foreign-owned, with Saputo (Canada), Fonterra (NZ) and Lactalis (France) the main players. Bega is the only major Australian-owned dairy company, along with some smaller companies such as Norco.

The same dairy companies that exploit Australian dairy factory workers also exploit Australian dairy farmers. Recently the processors announced this year’s farm gate price offers to dairy farmers for their milk. The prices offered are actually less than last year’s, being around $7.80 to $8.30 per kilogram of milk solids. 

These prices are around the farmers’ cost of production or even less. It is estimated that dairy farmers will be $200,000 to $300,000 worse off, as they are also being hit by rising costs for water, electricity and all their other inputs. More dairy farmers are expected to leave the industry.

Dairy farm numbers last year were 4163, down from 4420 in 2022, and 6308 in 2014. Australia’s milk pool has shrunk to around eight million litres. It is not surprising that we are seeing a massive increase in the import of dairy products into Australia from Europe, the US and New Zealand. In 2022-23, dairy imports rose from around 293,000 tonnes to around 344,000 tonnes over the previous year. This was an increase in value from $2.1 billion to $2.7 billion.

Farm gate prices paid by processors to dairy farmers in New Zealand are about 30% lower than in Australia, giving New Zealand companies a considerable price advantage over Australian processors, allowing them profit from exports to Australia.  Last year Australia imported 47,500 tonnes of butter, mainly from New Zealand. Much of the imported butter and cheese is being sold by supermarkets under their own house brands. 

In a move which will shake up the dairy industry in Australia, New Zealand-based Fonterra has announced that it will put its Australian operations up for sale. Fonterra employs 1600 people at eight sites in Victoria and Tasmania and processes 1.4 billion litres of milk each year.

The Canadian-owned superannuation fund PSP is deeply involved in Australian dairy farming through its company Aurora Dairies. This company has 450 employees and has 48,000 cows producing 280 million litres of milk on 54 farms in Australia. Aurora’s economies of scale will allow them to make a profit from dairying while small farmers struggle to make a living. It will be interesting to see if PSP makes a bid for Fonterra’s factories. This would give them control over the whole dairy business from cow to consumer. 

Australia’s small farmers and workers have the same enemy. Only unity in struggle will end the exploitation.

Print Version - new window Email article

-----