THIRD generation dairy farmer Paul Roderick has called on supermarkets to step up and support Australian producers if they want to see the nation's dairy industry stay alive.

The public has thrown its support behind the Australia's dairy producers after the recent decision by Victorian-based Murray Goulburn and Fonterra - Australia's largest dairy producer and the world's biggest dairy exporter - to slash the price they pay for farmers' product due to a slump in global milk prices.

Mr Roderick said the drop in the Victorian market would send shock waves through dairy farmers Australia-wide, forcing the price they get paid for milk to drop even further.

The Harrisville farmer is currently getting 61 cents per litre thanks to a seasonal bonus from February to July.

"All that's in jeopardy now with the crash in the southern milk price," he said.

"We consume about 500 million litres of milk a year in Queensland and 20% of that comes from the south."

Mr Roderick said the southern crash gave Queensland suppliers the opportunity to import more milk than usual from Victoria at a cheaper price.

He said this decision would force Queensland milk producers to drop their prices to compete, forcing more dairy farmers to abandon the industry.

"Financially it makes sense for them. But what we will be saying to our processor is that with the price we currently have we're (already) seeing a decline of milk production and farmer numbers so we can't afford a drop in price or we'll see a continued exodus," he said.

"In 15 years we've gone from 1500 suppliers to just under 400."

Mr Roderick said Queensland's main processors; Parlamat, who own Pauls, and Lion, who own the Dairy Farmers brand, both had overseas owners who would look to do what was best financially.

"They need to look at their local supply," he said.

"When the price does go up in Victoria again, and it will, that milk will become expensive to bring into this region once more.

"We're asking our processors not to be short-sighted, to look long-term and hold the current price."

A petition calling for a the Federal Government to introduce a milk levy, increasing the cost of milk by 50 cents a litre with money to go back to farmers, has gained more than 30,000 signatures.

Mr Roderick said, while he knew most Australians wouldn't mind paying the levy to support farmers, the responsibility should be on the major supermarkets.

"It's a great life to be a farmer (but) it's extremely challenging to do more and more with less," he said.

"In our opinion where it all went wrong was on Australia Day, 2011 when Coles decided milk was worth $1 a litre. Previously the cheapest milk you could buy was $1.30.

"I don't believe in a tax or levy, I believe in putting a fair price on a product.

"I think the consumer would be more than happy to pay a fair price.

"As soon as you create that perception that milk or fresh products can be sold at a loss you're going to lose supply."

Dairy farmer Paul Roderick talks about the price of milk in the Queensland market.
Dairy farmer Paul Roderick talks about the price of milk in the Queensland market. Inga Williams

"People ask what they can do and the key thing is, no matter what brand you buy, if you're paying about $1.50 per litre you're paying a realistic price that will allow profit to go back to the farmer," Mr Roderick said.

"I understand people want to buy things as cheap as possible (but) if you're buying milk at $1 you're speeding up the demise of the industry."

Coles recently promised to create a new home brand milk that will pass on 20 cents per litre from every sale to affected farmers through a "fighting fund".

The region's farmers, however, remain sceptical.

"It seems a bit cynical to me," Mr Roderick said.

"What we see as a solution is moving that milk price back to where it should be and setting a realistic price for your cheapest milk.

"It allows farmers, processors and even supermarkets to make a margin on milk. We're not asking for a ridiculous price, we're asking for a fair price."

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