You can’t escape the noise issuing from the dairy industry. Lower prices have hit them, and you may be wondering: should we feel sorry for them? Or is this more bleating from one of those sectors that always manages to privatise the gains, but socialise the losses?
Here is the answer. Dairy farmers actually have been screwed, thanks mostly to a higher Australian dollar and lower-than-expected growth in milk powder sales. Prices have been cut up to 15%, on top of a tough year with little rain.
The worst thing is the price fall -- announced by buyers just before the end of the financial year -- applies to the whole year. It’s basically retrospective, meaning money farmers had counted on is no longer theirs. Mental health in rural areas is a real problem and financial stresses will only make it worse.
About half of all dairy farmers were already expected to make a loss in 2015-16 (the red bars in the graph following), a worse result than 2014-15 (blue bars).
So it is tough times in the milking shed. But the average profit in the industry is better over the longer period, according to estimates by the Department of Agriculture. This year's expected average farm business loss of -$2000 follows two years where profit was around $65,000 a year. (That profit is after paying for operator and family labour.)
All commodity businesses have bad years. It should not be surprising to us in the cities when prices fluctuate along with global markets, and some operators end up in the red. That’s the way these businesses work.
What is amazing is the outpouring of support.
One hundred thousand signatures on a change.org petition and a six-minute Waleed Aly monologue full of swelling strings and even, maybe, a little tremor in his voice.
And, of course, the inevitable call for government to intervene and slug the rest of us with a levy to make up for this one bad year. That’s where this goes from being simply a very sad story to a public issue.
I tell you, working in the media industry and writing a lot about the retail and manufacturing industries, it’s hard to get too upset for dairy farmers.
Yes, their industry has some structural difficulties. They must navigate big buyers with some price setting power in the form of Fonterra and Murray Goulburn, Coles and Woolworths.
But they have also been riding a gigantic expansion thanks to booming export markets. Australia now has 2.8 million dairy cows, up from 1.6 million in 2009-10.
A few years back prices were at elevated levels, but at that time I didn’t spy dairy farmers on my TV at all.