Norco has increased the price of a litre of milk by 5 cents which lifts the average annual farmgate milk price to 97 cents a litre.
Norco chief executive Michael Hampson said ongoing geopolitical uncertainty was placing pressure on the sector, with fuel and fertiliser shortages driving sharp increases in costs for farmers and across the entire supply chain.
“These cost increases are unprecedented. Our farmers are paying double for diesel, triple for fertiliser and 40% more for freight,” Mr Hampson said.
These pressures are simply unsustainable without meaningful support across the supply chain – and this price increase is a small but important step in helping to offset those pressures.”
He said that while this increase is a necessary step, it may not be the last, with ongoing cost pressures expected to require further action to support 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.”
Mr Hampson said that these pressures are expected to curb winter planting of hay and cereal crops which will significantly push costs even higher again toward the end of the year for dairy farmers.
What does this means for shoppers?
“We know we’re asking shoppers to pay a bit extra for their milk, but I want to assure them that this increase is directly supporting our farmers during these challenging times – with every cent flowing back to them and their regional communities,” Mr Hampson said.
“To put it into perspective, the increase will likely amount to no more than 30 cents per week for the average household – but that 30 cents will significantly ease the pressure on our farmers and help secure their livelihoods.”
He said it was important to recognise that milk remains one of the most affordable staples in the Australian weekly shop – particularly when compared to other countries.
For example, Woolworths’ own-brand 2L milk retails for about $1.50 more a bottle in New Zealand, roughly 45% higher than in Australia.
Fourth generation dairy farmer Andrew Wilson said farmers were living and breathing the impact of cost escalations every day.
“Whether its fuel for machinery, fertiliser for the paddocks or just keeping things running, the costs keep rising and it’s something you can’t step away from,” Mr Wilson said.
“If these pressures continue, there’s a real risk that not all farms will be able to keep going – which is why support right now matters so much.
“We’re incredibly grateful for that support and the understanding from Australian consumers. It might seem like a small change at the checkout, but it makes a real difference on farm and helps us keep going.”
This information was provided by Norco.