The Moyne Shire is the latest Victorian council to try to quantify the effect of recent cuts to farm gate milk prices.
Dairy giants Murray Goulburn and Fonterraretrospectively slashed farm gate milk prices earlier this year, saddling farmers with large debts.
In a report prepared for the council, analysts warned the crisis would have a direct impact on local farm gate dairy output.
«There are 363 dairy farms in Moyne Shire, which is almost 25 per cent of the total number of dairy farmers in western Victoria,» the report read.
«Recent figures projected that a farm gate milk price drop of 15 per cent would result in a $170,000–$200,000 annual loss per farm.
«This loss would cause a $67.155 million direct impact [in] Moyne Shire.»
Impact of crisis ‘insidious’
Moyne Shire councillor Ralph Leutton is the former chief executive of Queensland Dairy Farmers Organisation, and sits on the board of Demo Dairy in Terang.
He said the council was doing all it could to support those affected.
«That $67 million, it’s like an annual impact that’ll happen because of that lower price effect. It’s just not viable on many farms anymore,» he said.
«That’s the issue, where people who have debt and owe the local shop money and the local mechanic money and all that, that’s where the flow-on happens into the community.
«It’s almost insidious how widespread the impact of these prices and the reduction of these prices are on the economy for our shire.»
Dairy figureheads to meet with farmers
The figures come as Dairy Australia boss Ian Halliday meets with farmers across the region.
Mr Halliday said he would be getting first-hand knowledge of the challenges facing producers.
«The challenging seasonal conditions have been going on for the better part of 12 months, so it’s been a combination of the dry seasonal conditions, and the milk price reductions just compounded that,» he said.
«We’re trying to do a lot to help farmers over the next 12 months, particularly to help farmers understand their true financial position.
«A lot of people are doing it very tough, we certainly understand that.»
Source: ABC
Link: http://www.abc.net.au/news/2016-07-07/dairy-crisis-cuts-$67-million-south-west-victorian-economy/7576158