Speaking to media this week, president of Australian Dairy Farmers Ben Bennett has said that the price of supermarket milk could increase by up to 20 percent, as farmers struggle with surging operational costs. As critical trade routes continue to be disrupted, the costs of essential farming materials – specifically diesel required for dairy operations and urea fertiliser needed to grow pasture to feed dairy cows – have skyrocketed. 

Unable to absorb these costs, farmers are warning that unless something is done now, dairy herds will shrink and milk production will drastically fall. 

“If we are serious about maintaining Australian milk production, retail pricing must better reflect the real cost of producing and processing milk,” Bennett said in a statement. “There is a shared responsibility across processors and retailers to ensure that value is returned through the supply chain in a way that supports farmers.”

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Credit: NewsWire / Martin Ollman

How much is milk going to cost?

Supermarket-branded full-cream milk is currently being sold for $1.65 a litre. A 20 percent increase would see the price go up to almost $2.

According to the ABC, Woolworths has begun paying an extra 10 cents per litre to the small number of dairy farmers that supply milk for its Farmer’s Own brand. Meanwhile, Lactalis, Australia’s largest dairy company, will be offering a temporary five-cent-per-litre ‘farmer support payment’ to its dairy suppliers from May 1. 

But Bennet has said that these are not long-term solutions. 

“Short-term support helps, but what farmers ultimately need is long-term pricing certainty and a fair return for the milk they produce,” he said. 

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