Dairy farms running into debt

Dairy farmers are under pressure from dropping milk prices and some are carving up their farms in the battle for survival.

Dairy farms running into debt

Dairy farms running into debt

Most are running at losses and are being forced to either sell up or delve deeper into debt amid fears some won’t even survive the new year.

Dairy farmer Warren Jacobs, from Mt Compass in the Adelaide Hills, has been working his farm for 30 years, taking over from his father, and now his son is learning the business too.

But the future is looking bleak for the farm.

‘We’re battling to pay our bills,” Mr Jacobs told 7News.

“We’ll be looking to cut costs, (but) we’ve already cut costs as much as we can.”

He says his farm is running at a major loss.

It costs him 40 cents to produce a litre of milk - but this year he’ll get just 37 cents per litre in return.
“We’ll have to draw down on a loan a little bit further to get through this year,” he said.

Plunging export prices mean domestic processors are paying four or five cents less per litre, and at the same time, farmers are battling soaring grain and power costs.

Most farmers agree that the cheap supermarket shelf prices are not helping their situation.

Coles insists that it is absorbing the costs so farmers and processors don’t suffer, while Woolworths admits it is “concerned about the future of the industry”.

David Basham from the South Australian Dairy Farmers Association said there are dairy farmers under extreme financial pressure.

“There are farms that have been going for a very long time that are disappearing,” Mr Basham said.

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