MAJOR supermarkets should increase the price of discount milk to $1.50 a litre, according to Australia’s peak dairy farmer group.

National advocacy body Australian Dairy Farmers (ADF) has renewed calls for supermarkets to increase the retail price of discount milk, with the increase going back to farmers. 

“Farmers have been hit hard by the impacts of drought, bushfires, and, of course, high production costs,” said ADF chief executive David Inall.

“The price farmers pay for energy… water and fodder for their cows remains high, but the retail price for their milk has stayed stubbornly low for almost a decade.”

Major retailers, led by Woolworths and Coles, last year increased the price of their private label milk brands from $1 per litre to $1.10 per litre, with farmers getting the full increase.

The ABC reported in July 2019 a “surprise move” by major supermarkets to raise the retail price of their home brand milk further, but it was “unclear” if farmers would benefit.

But Mr Inall said increasing the retail price of discount milk further to $1.50 per litre would reflect the inflation rises farmers should have received over the last decade to account for the current cost of production.

“We lost nearly 500 dairy farms in one year between 2017/18 and 2018/19, and since 2011, we have lost more than 1500,” he said.

“Since 2011, the average profit for a dairy farm in Australia has been $41,553 per annum.

“If we are to stop farm exits and hardship, then retailers need to increase the price of their store brand retail fresh milk to $1.50 per litre with the increase going back to farmers via their processors.”

Voluntary levy

Federal Agriculture Minister David Littleproud said a voluntary levy is the best option to support dairy farmers as it allows the market to respond, with consumers making purchasing decisions that benefit farmers.

“During COVID-19, supermarkets have been one of the few industries to prosper, so there is an opportunity for them to rebuild trust and ensure more money gets into dairy farmers’ pockets,” said Mr Littleproud.

“I have asked them to each individually consider extending and increasing the amount of the support they provide dairy farmers who faithfully supply products across the full dairy cabinet.

“This would allow the benefits of any supermarket’s levy or support schemes to be distributed evenly to Australian dairy farmers, rather than only to those whose milk happens to end up in private label milk.

“Dairy farmers don’t want charity. They just want to play on an even playing field.

“It is only fair that retailers play their part in giving farmers a leg up during this difficult time,” he said of the voluntary levy.

“This is a way of making amends for damage to the industry during the years of $1 milk prices.

“It will ultimately be up to each retailer to determine how much support they are willing to provide to our farmers.”

Mr Inall said the country’s approximate 5200 dairy farmers appreciated the support of the federal government.

“It is fantastic to see that the federal government recognises this is a major issue for the industry and is prepared to continue pushing for dairy farmers to receive a fairer price for their product,” he said.

“The retail prices of other fresh food products tend to fluctuate with demand, but the shelf price of milk has remained relatively flat.”