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The farmgate milk price, representing the rate dairy farmers receive from producers for their milk, is set to rise to an average of 97 cents per litre.
Currently, the price of Norco full cream milk in supermarkets ranges from $2.20 to $2.90 per litre.
“These cost increases are unprecedented,” stated Norco Chief Executive Michael Hampson.
“Our farmers are facing a doubling in diesel costs, a tripling in fertilizer expenses, and a 40 percent rise in freight costs,” he explained.
“Such pressures are unsustainable without significant support throughout the supply chain, and this price adjustment is a necessary step to help mitigate these challenges,” Hampson added.
Hampson said the rise was not about increasing profits for farmers.
“Right now, farmers critically need these increases to remain viable and protect their livelihoods – that’s the sheer reality of the situation,” he said.
“This is not about increasing margins – it’s about ensuring the sustainability of our farmers and the future of the Australian dairy industry.”
The price rise comes as the wider dairy sector asks Coles and Woolworths to raise the price of their generic own-brand milk to help farmers cover costs.
“Farmers will cut back production or exit the industry over the coming months if something isn’t done immediately,” Bale said.
Hampson said further price rises may be necessary as cost pressures continue to build.
Winter planting of feed crops is exposed to the same global pressures and any shortage could lead to increased prices for dairy farmers toward the end of the year, he said.
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