QDO won't celebrate World Milk Day with struggles facing industry in Queensland

The organisation said the Queensland dairy industry can no longer meets its domestic market consumption requirements and was unlikely to recover production volumes to meet domestic demand.

Drought conditions and the poor farmgate price for raw milk have led many farmers to sell up and leave the industry.

On average, Australians consume 102 litres of fresh milk per person, per year.

In the past about 95 per cent of all milk produced in Queensland went into fresh milk product; that is, fresh bottled milk.

The remaining 5pc was used by small processors manufacturing boutique cheeses, yoghurts and ice-cream.

Now, milk comes from interstate to meet Queensland consumption.

The end of $1/L milk was certainly a win for dairy farmers in Queensland.

It not only gave farmers a price increase but clearly showed the market that farmers would no longer accept retailers setting a minimum price for fresh milk.

But because only a portion of most farms' milk is allocated to private label brands, this meant only about an average of 3 cents per litre to farmers across their full supply.

"We didn't hear a single complaint from shoppers when the price of private label milk increased by 10 cents," QDO vice president Matthew Trace said.

"As our research showed, shoppers are happy to pay more if it helps the farmers and helps ensure they get fresh milk in future.

"This doesn't just apply to cheap milk, but to branded milk too.

"Unfortunately, help has come too late for many farmers and we've lost the ability to supply 100pc Queensland made milk unless farmers can make a sustained profit."

Mr Trace said processors needed to utilise the opportunity created by the end of $1/L milk to increase the price of branded milk and pass that back to farmers.

"That way they will be able to secure their milk supplies by ensuring that dairy in Queensland is profitable" Mr Trace said.

This story first appeared on Australian Dairyfarmer