Cheap southern milk sours the appeal of fresh, local supply

WIDE BAY dairy farmer John Cochrane is urging people to buy locally produced milk following the move by Australia's largest dairy producers Murray Goulburn and Fonterra to slash the price they pay for farmers' products.

He said a severely depleted world market, which is at the lowest point he has ever seen, is behind the price drop for milk produced in Victoria.

He said people wanted to drink a local product fresh daily, but the cheap prices of supermarket brands would drive people to buy them ahead of a higher-priced local product.

"If the people and processes decide they want to take a short-term approach and get cheap milk from the south, the farmers here will be leaving the industry," he said.

"And then when they realise that the world market has picked up again - the local fresh product will be depleted severely."

He said it was an extremely short-sighted way of seeing it and a long way from the regulations of the past, when the down market was supported.

"It supported the business, our jobs and it supported our balance of payments in Australia," he said.

Mr Cochrane said margins were also severely depleted by trying to supply a fresh quality product daily.

"If I calf a cow on February 1, which is unfavourable, because the best time is July, I will produce 1500 to 1800 litres less per lactation than in July," he said.

He said it meant farmers were getting $1000 less per cow per lactation of 300 days.

"If we want to protect farmers from foreign investors we need to take a longer-term view and support local products," he said.

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