That this
House: (1) notes with concern the impact on the Dairy Industry of the Coles milk
pricing strategy and that: (a) dairy farmers around the country are today seriously questioning their future having suffered through one of the worst decades in memory including droughts, floods,
price cuts and
rising cost of inputs such as energy and feed; (b) unsustainable retail milk
prices will, over time, compel processors to renegotiate contracts with dairy farmers and the prospect that these contracts will be below the cost of production may
force many to leave the industry; (c) the fact that supermarkets are now selling milk cheaper than many varieties of bottled water will be the straw that finally breaks the camel's back for many dairy farmers; and (d) the risk of other potential impacts includes: (i) decreased competition as name brands are
forced from the shelves; and (ii) the possible loss of fresh milk supplies to some parts of the country as local fresh milk industries become unviable; and (2) calls on the Government to: (a) ask the ACCC to immediately examine the big supermarkets and milk wholesalers after recent
price cuts to ensure they do not have too much market power and are not anti-competitive in their behaviour; and (b) support the new Senate inquiry into the ongoing milk
price war between the country's major supermarket chains».
What I predict is that interest rates will
rise until about the end of 2011, and then the
house prices will start to come under pressure - they're already under pressure now, but people have borrowed so much, that high interest rates, more will be
forced to sell.