Calls to buy more expensive milk to help milk producers

tebbybabes on 20/05/2016 - 15:51

I'm seeing increasing efforts of people to try and help struggling farmers by promoting the purchasing of more expensive branded milk products rather than the cheap store brand milk.

I'm all for supporting the farmers but buying the more expensive milk just doesn't make sense to me. I've done a bit of googling and am still confused as to how buying more exxy milk helps. What I've gathered is that the supermarkets and milk processors are the ones dictating what price milk should be. How the heck does that make sense? Why can't a farmer just refuse to sell milk if the price is too low? Could an OPEC for milk producers be a solution?

I just the strong impression that whatever milk we buy, the extra price isn't going to the farmer anyway. It would just go to the milk processor. So what's the point??

Food & Grocery

Comments

    • mskeggs on 24/05/2016 - 07:21
      +2

      You scoundrel.
      What about the poor beef/chicken/lamb producers? The embattled fishermen, the down trodden honey collectors, the jeopardised cheesemakers, the abandoned kangaroo cullers?
      You sir, are the worst sort of monster.
      By simply reversing your vegan lifestyle, and becoming a right-thinking, flesh swilling Australian, you could contribute to a flourishing agricultural sector.
      How long until the Project runs an expose to show the villain you truly are!!!!

      • cannedhams on 24/05/2016 - 11:52

        On the other hand, where would the lentil farmers be without me?

    • FW190 on 24/05/2016 - 07:44
      +1

      well my cats seems to be able to tell the difference between Woolies/Coles brand milk and the more expensive ones, they simply would not touch the supermarket milk

      regarding same factory, the Corolla and 86 probably all came from the same Toyota factory too, so are they the same car too? :)

      • cannedhams on 24/05/2016 - 08:07
        +4

        Cats should not be drinking milk in the first place, as they are lactose intolerant as adults and it upsets their stomach.

        In the second place, cats have very limited tasting abilities compared to humans. They have only several hundred taste buds, compared to over 9000 for a human (they do have a much better sense of smell though).

        In particular, cats are largely unable to taste sweetness, meaning that for a cat milk would probably taste like an emulsion of oil suspended in water and little else.

        The car example is a poor comparison. The same pipes carry the same milk from the same cows to differently branded bottles, thats it. Any perception of difference comes down to imagination and suggestibility.

        • FW190 on 24/05/2016 - 08:28

          my cats ain't just picky over milk, there are certain brands of canned food/biscuits which they would rather starve then eat them, I have tried it, a bowl of food would be untouched for 24+ hours, and they would be constantly harassing me for other foods :)

          re: milk, if it is indeed the same tank of milk filling different brands, then touche :)

          I will admit I have no experience in the dairy industry whatsoever, but you would think that if something is 50% cheaper then their competitor, some corners needs to be cut somewhere, would the farmer's pay cheque alone be enough to pay for the difference?

        • cannedhams on 24/05/2016 - 09:12

          @FW190: Most of the time it is the supermarkets themselves taking the hit on cheap milk. They do this because they perceive milk as a "door slammer" ie a loss leader intended to get people in the door. The idea is that the customers will hopefully buy other stuff with fatter margins as well as a carton of milk.

          The factories will twist farmers' arms as far as they will go. I have no doubt that they use the supermarket price wars as an excuse. But even if $1 milk disappeared off the shelf Parmalaat and Kirin would find other excuses for not increasing farm gate prices for milk.

          Farming has always been boom and bust. A little while back there was an oversupply, now things are turning around and prices are getting better. To be honest, people feel sympathetic for farmers in a way that they don't for other workers. Do you buy more expensive cars or shoes in the hope that the factory owners will be generous enough to share some of that extra cash with their workers? (they don't, by the way).

          The average dairy farm income is now $129,000 per year:- http://www.theland.com.au/story/3380723/dairy-incomes-on-the…

          No doubt dairy farmers work hard, but so do a lot of people who nevertheless don't see that sort of money. I second the suggestion above that you are better off buying cheap milk and giving your spare change to people who actually need it.

        • mskeggs on 24/05/2016 - 09:19
          +3

          @FW190:
          You can both be right on this.
          While the $1 milk is produced on the same production line as that company's branded milk, so there is no difference, there can be a difference between producers.
          For example, I have no hesitation in believing there is a taste difference between, say, Northern Rivers NSW milk and King Island as the climate and feed are different. If the cats prefer one over the other it is a preference, not a sign that the $1 milk is inferior in quality.
          My kids like chicken nuggets. That doesn't mean a pan seared free range organic chicken breast is inferior.

      • abc on 24/05/2016 - 14:12
        +1

        The 86 comes from a Subaru factory :)

    • Clear on 24/05/2016 - 08:33

      Does anyone worry about buying cheap flour because it drives wheat farmers to the wall? (it doesn't particularly, because wheat is a global commodity much like milk is).

      It hurts the Australian companies making the flour. When you have the supermarket giants pushing their own home brand and threatening to reduce shelf space for other brands if they don't lower their prices then it does hurt. Woolies are notorious for this.

      Homebrand wheat is usually made by Australian companies (depends on state) and lower quality wheat is used as well as the profit being very low.

      Supermarket brands in general with the price war have been putting Australian companies out of business. Particularly when a lot of the homebrand come from overseas. There is no denying it.

      IGA are good as they often have other brands cheaper (like flour) than their own black and gold while not being outrageously cheap like Coles/Woolies.

      • cannedhams on 24/05/2016 - 09:35
        +1

        Again, Coles and Woolies are supplied bulk flour by Allied Mills, which supplies about 60% of the market. About 20% of the market is supplied by Manildra and the rest by smaller mills. The bulk flour that AM supply to Woolies is the same that they supply to everyone else. There is no difference in terms of quality, any perception to the contrary is simply a testament to the powers of advertising.

        Again, the supermarkets take a hit on cheap flour. I understand that their margins are quite low, something in the order of several cents per bag.

        However, brands of flour do vary in that they are generally made to a specific "hardness" (ie gluten content). Some brand name flours are about 7% gluten, quite soft and good for cakes. Woolies flour is about 10% gluten and quite hard, better for bread (though not as hard as specialist bread flour) but not so good for soft cakes. I understand that this is because Coles and Woolies use the same flour in-store for their baked goods (mostly bread) so need a flour that is suitable for that purpose.

        I make bread from Woolies bread and the result is acceptable, whereas I know a Chinese chef who uses White Wings flour to make his noodles from scratch. He tried Woolies flour but there was too much gluten and the noodles took on too much water and were quite gelatinous.

        • Clear on 24/05/2016 - 10:47

          Yep Manildra are the supplier of home brand flour for Coles and Woolworths. I know that IGA will use smaller mills for their own Black and Gold in some states.

          The different brands are definitely using different quality wheat. Different regions will have different quality wheat so a lot of it is coming from the same place.

        • cannedhams on 24/05/2016 - 11:06

          @Clear: The different brands are definitely using different quality wheat

          No, they are not. As I said, different brands sometimes adjust the gluten content, by adding gluten or starch. Some brands may be more appropriate for some uses but not others.

          The quality of the flour is exactly the same.

        • Clear on 24/05/2016 - 11:21

          @paizuri: I'm saying there are different types of wheat used for flour that vary from each other and come from different regions of Australia. Their quality is different and if you take a look at AWB you'll see what I mean.

          I know for a fact that Tasmanian wheat isn't widely used commercially as the quality is inferior due to the environment and other factors.

          I'm only going by my experience of family being millers. I'm not one so I don't know for certain ;)

        • cannedhams on 24/05/2016 - 11:29

          @Clear: Pretty much all general purpose flour is made from hard wheat. Australia is quite unique in that regard, in Europe you'll see other types on supermarket shelves.

          Specialty flours are often made from other varieties, but we aren't talking about those, we're talking about the different brands you see on supermarket shelves.

          I doubt the flour brands themselves would have the foggiest idea where their flour is coming from. I havent heard about the Tasmanian issue, but I can't imagine that their share of the growers market is particularly large anyway.

        • Clear on 24/05/2016 - 11:42

          @paizuri: > I doubt the flour brands themselves would have the foggiest idea where their flour is coming from.

          That's interesting. All the brands I'm thinking of make their own flour. Perhaps they're not available nationwide.

        • cannedhams on 24/05/2016 - 11:48

          @Clear: White Wings flour comes from Allied Mills, the same as Woolworths flour. In fact all Goodman Fielder brands flour come from Allied Mills:-

          http://www.theland.com.au/story/3584954/allied-expands-brisb…

          Quote:

          "Apart from its own wholesale and commercial lines it has exclusive supply agreements as a bulk provider to the likes of Goodman Fielder group whose brands include White Wings, Pampas, Helgas, Mighty Soft and Molenberg."

  • nrg2010 on 24/05/2016 - 09:24
    +1

    I got to enjoy the Norco Capo milk (it was on special), really nice flavour and great in coffee almost as nice as cream.

  • [Deactivated] on 24/05/2016 - 10:39
    +1

    this reminds me of the time that there was a boycott to filling up with fuel for a day and watch the companies fold…… as I said it aint gonna do bugger all when you know people will always buy for their needs.

    I went down the track of supporting local farmers but it got out of hand year after year for prices and I gave up.

    now seeing as woolies can sell it for $2 a 2L bottle I'm sold with that……. to explain I am an industrial electrician and I have worked in the dairy industry and know that a tanker will go out and fill his tank up from several farms and then they go out to the processing plant and churn out your dairy products.
    so in other words multiple farms fill the same bottle.

  • ronald19 on 24/05/2016 - 11:23

    maybe it is just a new marketing strategy to make people think that "Milk is too cheap"

    Soon, you hardly see cheap milk soon!

  • eKPardesi on 24/05/2016 - 12:19

    In my view supermarkets try with home brands counter some of the supplier monopoly,
    by creating one of their own,
    farmers can only get better deal if they have some leverage to negotiate.
    often small farmers can not hold milk produced due to very short shelf life,
    which gives processors the power to set prices, super markets take advantage the same way.

  • [Deactivated] on 24/05/2016 - 12:31

    Has anyone been following the milk posts on the Coles facebook page?

    • mrjames on 24/05/2016 - 12:49
      +2

      So many idiots posting misinformation. I'm curious if there is any studies out there assessing the actually benefit of a Facebook page for a business, when majority of the time its used to lick the butt of misinformed consumers complaining because they've had a revelation since watching ACA.

      Coles make more money off branded milk than their identical generic counterpart. The problem has got nothing to do with Coles/Woolworth but rather lack of revenue for the processors. Therefore it's irrelevant if the milk is branded or not.

      The bogans on facebook may as well be writing cheques for MGC. The irony is that most people with superannuation have a financial interest in WW/Coles through exposure to WOW and WES.

      • [Deactivated] on 26/05/2016 - 16:56

        I'm curious if there is any studies out there assessing the actually benefit of a Facebook page for a business, when majority of the time its used to lick the butt of misinformed consumers complaining because they've had a revelation since watching ACA.

        Totally. I have a feeling companies are going to look back on the whole social media era and think "wtf were we thinking?"

  • stemcell on 24/05/2016 - 13:02
    +1

    I buy Tasmanian Ashgrove farm milk and have done for a long time because it's local to me but is this an independent or another small fellow operating under a big companies umbrella?

    • Clear on 24/05/2016 - 19:21
      +1

      Last time I checked Ashgrove are independent.

  • Johndemonic on 24/05/2016 - 22:55

    How does aldi milk compare? I buy the long life milk and use it sparingly because i can sometimes go without milk for a week or more.

  • JimmyF on 25/05/2016 - 00:10

    Its not as simple as farmers being paid per litre as such, they are paid based on a few things, volume one, but mostly on the milk solids.

    All the prices are listed here, a VIC farmer gets around 47.1 cents a litre or $6.24/kg for milk solids.

    http://www.dairyaustralia.com.au/Markets-and-statistics/Pric…

  • gringo on 25/05/2016 - 08:24
    +2

    It seems to me that farmers/miners never give back when times are good. If they could easily sell their product overseas for greater profit - they would.

    Maybe give some more to charity is my suggestion.

  • [Deactivated] on 25/05/2016 - 08:36
    +2

    Weird fact for everyone,

    In Israel they have a rule requiring some type of milk NEVER go over a certain price to ensure everyone can afford it. They have expensive options too.
    It comes in bags. NOT JOKING.

    It looks like this:

    http://2.bp.blogspot.com/-vMYlx9q1cCU/UIlHVwzMAEI/AAAAAAAAAk…

    • WhatWouldBiggieDo on 25/05/2016 - 09:24

      There's something a bit off-putting about milk in a bag….

      • nikkirose on 25/05/2016 - 12:46
        +1

        like how the milkbar gets it?

      • [Deactivated] on 26/05/2016 - 16:57
        +1

        Does it too easily remind you of goonbags? lol.

        • WhatWouldBiggieDo on 26/05/2016 - 17:38

          Haha. Makes me want to play "milk of fortune"

  • frostman on 25/05/2016 - 12:36

    Well Jonesys Dairy Fresh is one of a handful dairy farms where milk is made in AU and company owned by AU farmer (I think based in VIC)

    Problem is, most of their revenue is selling Fresh Milk to China including Baby formula, as if we couldn't get enough of that shit with the instant formula siphoning.
    So as a result, i'm counting that business out of my AU based/AU owned selection.

  • frostman on 25/05/2016 - 12:38

    I just the strong impression that whatever milk we buy, the extra price isn't going to the farmer anyway. It would just go to the milk processor. So what's the point??

    Do your research, there are a Milk brands owned and made in AU. The profits sure do make their way back to the farmers.

    Dairy Milk, Pauls and Pura arn't one of them.

    • nikkirose on 25/05/2016 - 12:44
      +1

      Owned by Australia and Made in Australia are different things. There aren't too many "Aussie" companies left who do not have an international parent.

      • frostman on 25/05/2016 - 13:19

        Why do they need an international parent?

        • nikkirose on 25/05/2016 - 14:17

          they don't need it, we just got all bought up.

        • frostman on 25/05/2016 - 14:33

          @nikkirose: Bullocks

          You don't get bought up just like that.

          You get bought up when rich company comes and makes an offer to you and you agree because you're greedy.

          Later when the discussion comes around helping the AU farmers and buying their milk, you start to jump up & down asking for local support by buying your product.

        • nikkirose on 25/05/2016 - 14:38
          +1

          @frostman: I seem to recall droughts and flooding rains, with little to no support to our farmers, because we are to busy propping up a mining industry that loses money, rather than invest in capital infastructure for the future. In times like these, things like farms and dairies are vunerable to international takeover, better than them packing up altogether.

        • frostman on 25/05/2016 - 16:40

          @nikkirose: The mining industry saw us through a potential catastrophic collapse in 2008.

          Selling our local Farming company to XYZ Japanese.Co isn't going to make me "support Aussie farmers".

        • 00 on 25/05/2016 - 23:14

          @frostman: or a big multinational enters the local market and uses their muscle to force you to sell or go out of business

  • nikkirose on 25/05/2016 - 12:42

    Dairy farmers (not the brand, the small farms) are contracted to supply a certain amount of milk each day, they are fined if they fail, thats why they can't refuse to sell. If you want to run a dairy without precontracting your milk supply, good luck to you.

  • mranderson978 on 25/05/2016 - 18:48
    +5

    I had a chat with a farmer about this issue.
    He told me to keep buying the $1 milk.
    The problem is the international price, and not the $1 supermarket milk!
    Buying the expensive milk does not change the price the farmer gets for the milk he produces.

    • franek on 25/05/2016 - 22:02

      No offence but here we go again back to square one. What is the real story here? If we buy the more expensive milk does any extra money go to the farmer? Some say yes, some say no. I'm not sure if @Jamaco has any status as a stakeholder spokeperson but his My Dairy says that:

      These companies supply Coles and Woolworths with the $1 per litre milk. This milk is the cause of farm gate prices to continuously drop! By buying branded milk, you are showing these companies that you value your farmers and they will be able to increase their farm gate prices.

      • mranderson978 on 26/05/2016 - 09:48

        The only way to be certain the farmer gets the cash is to rock up to the farm gate and buy it from him direct! The government has made this illegal, of course, but you might find a farmer who is willing to do it.

  • fez on 25/05/2016 - 21:53

    i don't drink milk. I'm not a baby cow.
    mooo
    wife occasionally buys a 1lt A2 or boutique brand when she feels like it.

  • nimnomnimy on 25/05/2016 - 22:52
    +1

    I don't understand how people can blame Coles or woolies who essentially are just reselling their product on a larger scale. The farmers have a choice, they don't have to agree or sign contracts, they can sell direct, they can create a supply group, they can set the prices of their own milk. they are not victims, they can band together and reduce supply, invest in innovation to create new products or a million other ideas.

    Afr saying that a measly $200k is nothing to give back is just typical journalist tactics for creating a headline. Durkan has given people a choice to give back with their spending power, how can you expect more? I'd like to see how much the afr has given to farmers

    People seem to forget that they (Suoermakets) are running a business, they provide you with a service and take a lot of the risk by investing the capital, losing stock to spoilage etc.. they reinvest a huge portion of their profits back into the economy and directly and indirectly support hundreds of thousands of Australian jobs.

    • nimnomnimy on 25/05/2016 - 23:56

      A Suoermakets duty is to its business, customers and shareholders - not its vendors / suppliers. offering a product for a higher price where the additional price goes direct to farmers (essentially charity) is a huge cost to the business, they essentially take more inventory (increasing demand for farmers) more risk and no return.

      • 00 on 26/05/2016 - 00:07
        +1

        Except when you're not "just a business". When you control the majority of the market you dictate the rules.

        http://www.abc.net.au/news/2013-03-27/cohen---supermarkets/4…

        http://www.smartcompany.com.au/industries/agribusiness/69493…

        • nimnomnimy on 26/05/2016 - 07:33
          +1

          no one is holding a gun to their heads.

          They see the dangling carrot of big orders and money coming in and they just take it - then they complain about something they agreed to. Their position is no ones fault but their own and they got their by greed.

          Eventually many of the farms will close down, sell out, innovate or whatever else and it will be the best thing for the industry because it will mean less supply and a good negotiating position to increase prices.

          thats basic economics, and when prices do go up, no one will be crying poor Coles, poor woollies - it will be the same people complaining now saying that prices of milk is too high and the supermarkets are greedy for profit

        • 00 on 26/05/2016 - 08:00

          @clickship:

          Perhaps not a gun but sounded serious:

          "Coles’ practices, demands and threats were deliberate, orchestrated and relentless.”

          https://www.accc.gov.au/media-release/court-finds-coles-enga…

          https://www.accc.gov.au/media-release/coles-refunds-over-12-…

          You say farms closing down will be a good thing. I suppose we'll then be importing Coles branded powdered milk by that stage.

        • frostman on 26/05/2016 - 08:04

          @clickship: Agree.

          Typical scenario:

          <International Company/Asian Group>: Hi, we propose to buy your company brand, you keep producing milk but how does increasing your production/sales of your milk from 200 Litres are day to 1000 Litres a day sound like? We have big demand in Chinaaaa

          <Tru-Blu AU Farmer>: Sounds good! lets do it.

          <International Company/Asian Group>: 12 months later, sorry demand has stalled, just keep producing at same rate and same cost for now

          <Tru-Blu AU Farmer>: A Current Affair?? hello? We true-blue aussie farmers need help from the public to buy our own aussie milk!!

        • nimnomnimy on 26/05/2016 - 09:02
          +1

          @tommyc: no, the main issue is that supply is greater than demand, when some close, it will reduce supply and balance with demand which will create a realistic market price.

          It won't mean that you can't get Australian milk, it just means it will be more expensive to buy. That's the ideal outcome.

          Alternatively, If farmers close up shop and the other farmers increase supply, they will be in the same spot they are now.

          Obviously those are over simplifications because there are other market factors such as international price of milk and importing but that's a government policy issue not a business issue.

          Regards to the threats, yes everyone who is spending money theatens not to spend it or to spend it elsewhere to get a better price. This is what you do when you want a price match and this is why companies have price match policies. There is nothing wrong with threatening not to spend your money, regardless of whether you are an individual or a company and regardless of size.

  • Windows98 on 26/05/2016 - 09:53

    I don't get why the $1 per L companies are able to sell Aussie milk that cheap for the past few years but other companies can't and are unhappy?

    Are the cheaper farmers doing something dodgy?

    I go thorough 5L a week at home and buy the UHT boxes, 20 at a time to save having to keep buying milk.

    I've read through articles stating farmers are unhappy but haven't yet found anything saying that coles/woolies/aldi are doing something underhanded or illegal to get the price down and make me stop buying it

    • Tyrx on 26/05/2016 - 13:41

      Coles and Woolworths use their home-brand milk as loss-leaders to get people through the door. They pay the same price to the two major processors (adjusted for volume) as other private labels. There's an argument that Coles/Woolworths put too much pressure on the processors, but that stance is bunk. Most of our milk is exported and not consumed domestically. There's not really any "cheaper farmers" out there - they all have standard rates they get paid for the milk solids they provide.

      Farmers are just taking a whinge because they want the public to cover their bad investment decisions. I kinda have sympathy for those that didn't make huge investments out of greed, as they still get hit due to the gluttony (some fault of this is due to EU subsidies) in international milk supply. They will survive, but their profits won't be as large as they were in previous years during the boom. The farmers who have major issues are the ones who invested too much on the assumption that prices would either stay at record levels or continue to rise.

      • Windows98 on 26/05/2016 - 15:28

        Thanks for the info. There's so much fragmented information out there regarding this, it's impossible to get a straight answer.

        Looks like I'll be sticking to the $1 milk and look forward to having the aisle all to myself until the fad wears off.

        • AlienC on 29/05/2016 - 06:53

          Some guy was ranting on about super creamy milk which got me seriously more than half excited to go out and try it (i.e buy it)

  • JimB on 26/05/2016 - 10:37
    +1

    I believe farmers should be paid a fair price for their milk, however, the milk processors determine the price farmers are paid, not Coles or Woolies.

    I'm sick of these fu#king idiots who think buying a branded milk will help farmers, all that achieves is greater profits for the milk processors and Supermarkets as Coles or Woolies make nothing on the $2 milk, most likely it's a loss leader.

  • fruit on 26/05/2016 - 16:41

    lol what a stupid idea

  • hal9000 on 26/05/2016 - 20:29

    maybe farmers can try sell their milk overseas. in indonesia, the supermarkets are selling a carton of 1L fresh milk for $2.5.

  • snajper on 27/05/2016 - 07:29
    +1

    Having lived in quite a few countries, I have never seen government that cares less about it's farmers. They are our bread and butter (feeding our nation)and quite simply there is nothing more important that we have to protect. With rapidly changing climate we need to have as many farmers around as possible to ensure that we produce enough good food.
    We are happy to pay $4 for 2L of coke but $3 for same amount of milk is too expensive. In Switzerland and Germany farmers drive X5s and rightfully so as it is hard work and well deserved.
    Our farmers are alone in their fight with big supermarkets and corporate giants and are literally bullied into selling goods at ridiculous prices. The government will close their eyes quite happily as long as the big boys pay donations to either of the parties. In the rest of the world that is called bribe.

    • AlienC on 29/05/2016 - 06:50

      You just reminded me to buy coke tomorrow thank you!

  • [Deactivated] on 27/05/2016 - 21:10
    +1

    The thing that has confused me about this campaign is that a significant number of independent retailers (greengrocers, select IGAs, Spudshed) here in WA sell locally owned, non Coles/Woolies milk (variety of brands, Ferguson Valley comes to mind off the top of my head) for $1.98 for 2L, 2 cents cheaper then the generic milk. To me this proves that it's another "evil coles/woolies" beatup rather than having any sort of actual legitimacy.

    The bogan outrage on Facebook about it all has been rather entertaining, though.

  • AlienC on 29/05/2016 - 06:48

    That's it I'm burnt me some extra supple super creamy extra virgin olive oil milk today or tomorrow tis freezing up here in the upper blue mountains.

  • AlienC on 29/05/2016 - 06:58

    This forum thread is giving me a headache I should have never come here… I'm going to go now and drink some milk

  • Ect on 31/05/2016 - 14:11

    I buy local milk from Udderly - I can be sure it's fresh and has done low miles. Much of a carton of milk's life before it reaches the shop fridge is unrefrigerated. I think homogenisation also reduces taste - I don't know if it's all the processing or whether just having tiny bits of cream bobbing around helps. Who wants a food (eg a roast dinner) to taste homogenous anyway!

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