Dairy farmers struggling as milk prices increase in supermarkets

TasFarmers Dairy Council vice-chair Andrew Aldridge says some farmers will benefit from Coles and Woolworths’ decision to increase the prices of their home-brand milk products.

However, he says that only a small number of dairy farmers will benefit.

Coles has increased the price of its home-brand milk by up to 20c.

One litre of Coles brand fresh milk has risen from $1.65 to $1.85, with two litres up from $3.20 to $3.55 and three litres from $4.65 to $5.15.

A Coles spokesperson said the price increases would cover rising costs for the business and farmers.

“We are passing on the additional costs which have been, and will continue to be, incurred in our dairy supply chain,” the spokesperson said.

“We know rising cost pressures are affecting many Australians, from farmers and suppliers facing higher input costs such as fuel, fertiliser and packaging, to families navigating increases in petrol, energy, insurance, mortgage and rent.”

Meanwhile, Woolworths has started displaying messages in-store for customers.

“To support dairy farmers and processors, we have increased the price of Woolworths Own Brand Milk,” the message reads.

Mr Aldridge said the majority of Tasmanian dairy farmers have their milk exported or used in food service, including products such as cheese and butter.

“The big supermarkets have direct suppliers, but there are very few farmers who do that,” he said.

“The total number of dairy farmers versus the number who directly supply Coles and Woolworths is quite small.

“So while they aren’t technically wrong in saying they are helping farmers by rising prices, it isn’t assisting a large percentage of the industry to deal with increased costs.”

Locally, Mr Aldridge said Tasmanian dairy farmers were struggling.

“There is significant pressure on the cost of production.

“With most of our milk being exported or used in food services, the conversation hasn’t really been had around how the increasing cost is being distributed through the supply chain.

“Tasmanian farmers are playing on an international market, and we were very reliant on government and processors to ensure that we are able to extract fair cost recovery out of those markets.”

With processors set to announce milk prices in less than a month, Mr Aldridge said he hoped they would benefit dairy farmers.

Lactalis-Mainland Dairy has already introduced a temporary Farmer Support Payment, with the relief averaging 64 cents per kilogram of milk solids.

“Farmers are already spending money now for next year,” Mr Aldridge said.

“So really the temporary support payments aren’t really covering the costs that are being borne for next season.”