This practice, the Dairy Council explains, instils confidence into the farming sector, encourages capital investment and inspires new people to enter the industry.
According to Dairy Australia, the trend in production growth was in response to two of the state’s major processors paying a sustainable price and one of these, Parmalat, also paying a meaningful growth incentive through summer.
WAFarmers Dairy Council President Phil Depiazzi said the state’s milk production had begun to increase last year, largely thanks to the implementation of sustainable prices.
“Last year saw us lift milk production for the first time since 2010-2011, and we are now in the position where we are leading the nation in production growth, up 5.7 per cent for 2015-2016,” Mr Depiazzi said.
“This is largely attributable to the stable milk price being paid by the majority of the processors and, to this end, we are seeing continued production growth within the state.
“This is a clear demonstration of the positive effect that sustainable milk prices have, and how it ensures that our position within the market remains competitive.”
Despite this, Mr Depiazzi said there continued to be real concern around the highest and lowest price being paid to farmers which needed to be addressed.
“Unfortunately, one major processor is still failing to pay its contracted farmers a competitive price and this is having a negative impact on their farmers confidence,” he explained.
“There are very real prospects for WA dairy products to be sold in to the Asian market.
“A truly sustainable price would ensure that processors have the level of milk required to access and supply these markets and would enhance these market opportunities, so we encourage all processors to pay a sustainable farm gate price in the interests of the WA dairy industry.”