For overseas readers; Coles, one of our major supermarkets has dropped the price of milk to $1 a litre, which is, by all accounts unsustainable. The other supermarkets are following suit.
I have heard quite a few stories as to how the supermarkets are able to do this without destroying the dairy industry, and how (apparently) the money we 'save' on our milk is not coming directly from the pockets of our dairy farmers.
- Coles reckons it gave the diary farmers a 'pay rise' last year to offset the drop in income from the cheap milk (sounds a bit elaborate but okay) - but what then are the other supermarkets doing, having been caught unawares by Coles aggressive grab for customers? Giving pay rises to their suppliers? Somehow I doubt it.
- Another theory is that the supermarkets are diluting their milk with water or adding more permeates to it.
- Firstly, Baristas are reporting that the cheap milk is harder to froth, suggesting that either the milk is diluted or that fat has been removed (put simply fat makes froth).
- And Secondly WFT are permeates?? "Permeate is a waste product of dairy production created by removing all the fat {from milk} and then concentrating the material that is left, it can make up to 12 per cent of some milk brands in supermarkets.
NSW farmers say permeate costs less for processors to buy than milk, so the two can be mixed to produce a cheaper product." Article here - I found this diagram (click to enlarge) about how they process milk...
- That makes you feel better about our milk supply doesn't it - natural product?? really??
- Finally today they are saying that the supermarkets (both Coles and Woolies own a large number of petrol stations) are increasing the price of petrol to cover the shortfall in income/profit
Apparently eggs are next on the radar - I shudder to think what that price war will involve (increasing grain costs and less profits for the farmer will mean they will cut costs in areas that include quality of life for chickens, and the food that they are fed, which is ultimately the food you eat) - and I have forgiven our chooks for digging up the asparagus AGAIN.
I've been loving the cheap milk, we go through around 6 litres a week - more if I'm making yoghurt and so on. But after doing some research I just don't trust that the cheap milk is not a lesser quality product that is being produced at the expense of our dairy industry and the expense of the consumer at the petrol pump. So I've decided that I'm going to start buying branded milk, organic if I can get it. Yes. Triple the price, maybe more, and we are utterly skint at the moment. But I think its the right thing to do. In fact, I don't think I have a choice.
:)
