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Low farm-gate milk price and drought forces an end to 100 years of dairying

Nathan Morris and Arlie Felton-Taylor, Monday September 10, 2018 - 06:18 EST
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Rowan said that the low farm-gate milk price combined with drought has pushed them to their limit. - ABC

After almost 100 years of dairying, the combination of low farm-gate milk prices and the drought has forced a Darling Downs farmer to pull the pin.

This week Rowan Mengel sent another truck of cows away from his property at Felton, south-west of Toowoomba, in a last-ditch effort to boost his cash flow as the cost of fodder continues to soar.

"Now if everything was fine, I probably wouldn't sell them at this point in time," Mr Mengel said.

Underlying it all, he said, was an unsustainable farm-gate milk price which, combined with the drought, is sadly catching up to some in the industry.

A family legacy



For almost 100 years Rosedale has been in the Mengel family.

"My grandfather came here in about 1920, '23 — been dairying ever since, and my father did too," Mr Mengel said.

But that is coming to an end after he has been pushed to his limit.

This month Rowan and his wife Isabel have decided to sell their milking herd.

The impact of drought

During inevitable periods of dry, the couple is normally prepared with plenty of feed on hand, stored in large silage pits.



"I've always got away with it," Mr Mengel said.

"I've got four pits here, had them full.

"At one stage here a few years ago I had 12,000 tonne on hand — it's all gone."

In just over two months, the cost of hay has soared from $300 per tonne in July, to $500 per tonne.

"We've got to off load them so we don't have to feed them — they're past their use by date — and yeah, get some money in to pay bills," Mr Mengel said.



The squeeze of $1 a litre milk prices

More detrimental than the long dry, is the financial squeeze resulting from a sustained lower price paid for milk at the farm-gate.

At the same time milk can be bought for $1 per litre at supermarkets, Mr Mengel receives about 60 cents per litre

"The cows have made me where I am today, but unfortunately, the cows are destroying me — not through any fault of their own — it's because of the drought and this dollar milk," Mr Mengel said.

His wife Isabel said as their margins began to tighten, following deregulation in 2000, they tailored operations to stay afloat.

"[People thought] the farm-gate price wasn't going to hurt the farmer — try $80,000 dollars a year, so it [did] hurt," she said.

"But we got through it, Rowan found ways. We reduced staff at the time again — but now it's not possible."



Proposed milk levy

David Janke milks about 350 head of cattle on his property near Westbrook, west of Toowoomba.

Normally he grows all his own silage, but has recently had to outsource supply — it is the first time, he said, the whole eastern side of the country has been in such a dire situation.

This week lobby group Queensland Dairyfarmers' Organisation (QDO) of 10 cents per litre to be added to supermarket milk.

"It's a great idea, it's a great start, I'd love to see it at least 20 cents," Mr Janke said.

"Because there's a lot of people that don't realise how far behind dairy operations are on these current costs."



Employees chip in to help

Back at Rosedale, Rowan Mengel has been loyally supported by farmhand Brendan Donovan.

Before the decision to sell the herd, Mr Donovan organised a fundraiser to subsidise the cost of feed.

"At 60 cents a litre for an item that can branch to over a hundred different supplements: cream, custard, butter, cheese — but the boss gets the bottom line. I do not understand [it]," he said.

"In a kitchen, you don't sell your steak for $10 when it cost you $9 — your kitchen would go bankrupt."



Failing a change in luck, or the weather, the Mengels will be forced to sell the rest of their herd or send them to slaughter.

"There'll be 24 going today so, [I] don't know what else can you do — let's just hope something changes," Mr Donovan said.


- ABC

© ABC 2018

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