Dairy farmers call for fair milk prices

A Tasmanian dairy farmer says he is getting mixed messages as to what the farmgate milk price announcements will be.

Amid rising production costs for farmers, Lactalis-Mainland Dairy has introduced a temporary Farmer Support Payment from 1 May 2026, averaging 64 cents per kilogram of milk solids.

Dairy farmer Geoff Cox said the majority of Tasmanian producers supply milk to Lactalis, which recently bought Fonterra.

TasFamers Dairy Committee Vice Chair Andrew Aldridge said the temporary Farmer Support Payment was recognition of the pressure on producers and thanked Lactalis-Mainland Dairy for stepping up.

“This payment will go to provide relief at a critical time,” Mr Aldridge said.

“It shows what can be achieved through constructive engagement, and we welcome further discussion to ensure that this support payment is in line with the true nature of the cost increases faced by Tasmanian dairy farmers.”

But Mr Aldridge said he was worried that, without broader commitments from other industry participants to help mitigate rising costs on farms, the deeper issues across the entire dairy supply chain would not be addressed.

“We recognise not only processors, but also our suppliers and customers are also facing higher costs, and we ask that all parties understand the need to engage in constructive engagement and follow-up and that all act with the highest level of transparency possible to ensure the utmost success.

“What farmers are asking for is clear, consistent and evidence-based approaches to how costs are calculated and where best to fit them in to ensure equality in these difficult times.”

Mr Cox said he had no expectations about what the farmgate milk price would be.

“We’ve seen very mixed messages from industry and the information we have available.

“But if prices don’t improve, farmers will really struggle to make it work.”

The TasFarmers Dairy Committee is calling for a milk price that reflects the true cost of production, greater transparency across pricing structures, and clear communication and accountability around cost increases.

“This is about making sure the system works fairly,” TasFarmers Chief Operating Officer Neil Grose said.

“A truly sustainable dairy industry depends on costs and risk being shared, and a commitment to not allow the costs to be concentrated at the farmgate.”

Mr Aldridge said Tasmania’s dairy farmers are facing climbing costs across nearly every part of their business.

“Farmers understand costs are rising across the supply chain, as they are seeing it daily in their business.” Mr Aldridge said.

“And historically, these cost increases have left farmers attempting to absorb the hit with little transparency on how the rest of the supply chain is reacting.

“Under the current industry structures, dairy farmers have no recognised ability to recover rising costs.”