It seems that the product of the dairy industry is exactly the reverse direction to how the general price structure of industry works. The price of milk is determined by what the composium of three giant retail chains decide they will offer it to their customers.
When Coles, Woolworths and Aldi thought they would attract more customers by selling milk at a dollar a litre that was a " gun at their head " approach to the dairy industry. Based on a retail price of a dollar a litre plus the sellers profit margin, that determined the price the grocery chains were prepared to pay to the dairy industry. Unfortunately that was close to production costs and left little in the way of a profit margin for the producer.
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