Australia’s dairy farmers are
going through tough times and in fact that is an understatement because the
latest round of cuts in the price of milk have made many farms unprofitable.
There is something we can do about that.
It shoudn’t be a surprise that
traders at QVM have some affinity with dairy farmers. We are both small
business operators (often family operated) experiencing tough times due to
market forces (in our case a retail recession). It has been said that over
supply is a big problem for the dairy industry and traders in the top end of
QVM in categories that are over represented know what that can mean.
The long term answers for the
dairy industry lie in a new model. They will need to rearrange their production
and supply chains. In fact we are told that their whole business model will
need reassessing. It sounds a bit like a renewal for the dairy industry and I
apologise for once again drawing a parallel with our QVM experience.
In fact the two are quite
different. Dairy farmers have a sudden perfect storm of difficulty caused by
the decision to cut milk prices below sustainability levels. Apparently there
has even been an attempt to backdate the price reduction leaving some farmers
with heavy debts. The milk industry, including the dairy farmers, need to take
responsibility for the effective management of their industry but the
suddenness and the depth of this latest dilemma has caused many people to
abandon blame and look for some short term relief that will allow measured
correction over time.
