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Dairy Farmers In Victoria, Australia Hit By Drought (July 2013)

Dairy farmers in Southwestern Victoria, Australia are struggling to feed their cattle grass as droughts have halted the growth of the grass that feeds them.

This has caused hay bills to rise, as more of it is required as a fodder substitute for fresh grass. According to ABC Australia, this is one of the most 9-month droughts on record. However, $30 million of federal government aid will be provided.

This is a clear example of how drought drives up the cost of food, as farmers have to face the decision of charging more for their milk, or bearing the financial burden on their own. However, either way, there is a financial burden to bear as increased milk prices are likely to decrease demand, hence reducing revenue.

Source: ABC Australia

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