Latest news with #milkprices
ABC News
3 days ago
- Business
- ABC News
Dairy farmers disappointed with new farm gate prices as drought, floods add financial pressure
Dairy farmers have been disappointed by the farm gate milk prices announced for the next financial year as they continue to struggle with drought and floods. Dairy companies have revealed their opening milk prices, a month before the start of the financial year, as required under the mandatory milk pricing code. This year's milk prices are up slightly on last year, ranging from $8.60 to $9.20 per kilogram of milk solids. But they are lower than what farmers were hoping for. The dairy heartlands of Victoria, South Australia and Tasmania are in the grips of drought, while many farms in New South Wales and Queensland are recovering from floods. "This is not a normal year," Colac dairy farmer and Dairy Farmers Victoria president Mark Billing said. "The climate challenges we are seeing right across Victoria, coupled with extraordinary cost increases on farm, mean that farmers are carrying unprecedented levels of financial and emotional strain." He said companies risked the rapid decline of Australia's milk production if they did not increase prices to help dairy farmers through the tough times. "Milk processors have repeatedly said they value their suppliers," Mr Billing said. The majority of farmers are paid for the level of fat and protein in their milk, known as milk solids. Many were hoping to be paid at least $9.20 to $9.50 per kilogram of milk solids, which equated to about 70 cents per litre. Mr Billing said the prices under $9.20 on offer from the dairy companies were not enough for farmers to get by. United Dairyfarmers of Victoria president Bernie Free agreed. "It's pretty disappointing, really," he said. He said some farmers would quit the industry if milk prices did not go up soon. "I think it's a concern that farmers may move out of the industry at this price mark, especially in [drought-affected] western Victoria," he said. "Gippsland is not far behind us, and there are pockets in north-east Victoria that are doing it pretty tough. Dairy Australia's latest outlook shows the national milk pool is on track to drop 1 per cent this financial year, compared to the previous one. It has also forecast a further drop in production of up to 2 per cent in 2025/26. If that happened, milk production would sit around 8.24 billion litres, almost 3 billion less than the industry's peak in the early 2000s. Dairy Australia analysis and insights manager, Eliza Redfern, said ongoing challenges with the weather were affecting production. "We are also seeing a lower appetite for farm business growth, and we do expect some farm exits to continue within the new season," she said. Fonterra Oceania was the first milk company to announce its opening milk price for the next season, with one of the lowest prices — an average of $8.60 per kilo of milk solids. Its director of farm source and sustainability, Matt Watt, said while it was higher than last year's opening price, he understood farmers would like more. "What we've got to do is make sure we're running a business that is here, not only this year, but for years to come," he said. "That's our job, frankly, to make sure that we're continuing to make decisions that support paying a milk price that we're earning in the market. "Sometimes that is a milk price that farmers appreciate and enjoy, and other times it takes a bit of time."
Daily Mail
4 days ago
- Business
- Daily Mail
Australians warned to prepare for a huge 'bill explosion' that's about to drive up the price of nearly every essential
Australian consumers are being warned to brace for a bill explosion with the cost of milk, butter, and meat set to rise as dairy farmers battle floods and drought - while power prices continue to soar. Egg prices have already surged by 18.6 per cent during the past year, with the latest natural disasters threatening to revive Australia's cost of living crisis. Last month's flooding on the NSW mid-north coast has particularly decimated dairy milk herds near Taree, Wingham and Gloucester. This is occurring as farmers in Victoria, South Australia, Western Australia and Tasmania battle drought, which is pushing up the price of fodder to feed stock across the country. Joe Bradley, the president of dairy farmers' group eastAUSmilk, told Daily Mail Australia a 10 per cent fall in Australian milk production was likely, as a result of the latest floods in New South Wales and Cyclone Alfred in Queensland in March. This would ultimately hit consumers, and see supermarket prices for a litre of milk climb from $1.55 to levels above $2. 'Prices of dairy and dairy products will have to go up, there's no ifs or buts,' he said. 'Milk has to go up: you can't be paying $1.50 a litre for milk, it has to be two bucks a litre minimum for home brand milk.' Eight in 10 dairy farmers are now battling the aftermath of floods or droughts. 'We estimate that between the drought and the floods and Cyclone Alfred, there's probably 80 per cent of the dairy farmers have been affected one way or another,' he said. 'It's got to have an impact and prices for farmers' stuff is going through the roof.' A new wave of natural disasters can lead to more farmers quitting the industry, leading to Australia importing more dairy products. 'The consumer will one day pay for all this, there's no doubt about that,' he said. 'It's just a matter of getting in now and trying to make sure that we have fresh dairy for the next generation. 'I can tell you, if milk keeps getting shorter, dairy products keep getting shorter, it might not be a staple diet anymore - it might be a luxury diet.' Back in 2001, shortly after dairy deregulation, Australia's annual dairy milk production peaked at 11.3billion litres, back when Australia was home to 18.8million people. That is estimated to have fallen to 8.2billion litres, as Australia's population has grown to 27.3million. During the past two decades, the number of dairy farmers in NSW and Queensland has also plunged by 85 per cent. 'Once you go out of dairy, you don't come back; milk is getting less, Australia's population is growing,' he said. Australia has also become a net importer of butter - exposing consumers to fluctuations in global demand for the spread with less of it now made locally compared with two decades ago. Michael Harvey, a senior dairy analyst with Rabobank, said higher global butter prices, as a result of problems like blue tongue disease affecting European cattle, could see Australians pay more for butter. 'The reality is it's a record-high butter price we've got at the moment,' he told Daily Mail Australia. 'If it remains elevated, there's a chance it will, you'll see retail prices moving higher. 'We actually import more butter now than we did - it's a long-run decline in milk production.' Major dairy processors like Norco, Lactalis and Saputo are publishing farmgate prices on Monday, which will determine what dairy farmers are likely to be paid for their produce at a wholesale level in the year ahead. 'Higher global prices feed through to higher retail prices,' Mr Harvey said. 'It's improving global demand, which means you get higher global prices for dairy which then put upward pressure on local prices whether it's at farmgate or in the wholesale market.' Australian consumers have this year already been dealing with an egg shortage after an outbreak of avian influenza affected egg production in Victorian and NSW. As a result, egg prices soared by 18.6 per cent in the year to April with price statistician Michelle Marquardt blaming the outbreak of avian influenza. 'While annual inflation eased for most food categories in April, egg prices were up by 18.6 per cent in the past 12 months. This comes as supply has been affected by bird flu outbreaks,' she said. Agribusiness giant Elders is also predicting an increase in beef and lamb prices, in the six months to September, as a result of drought conditions in southern Australia. This would reduce the supply of livestock 'following increased de-stocking in dry regions'. Meanwhile, electricity price increases of somewhere between 0.5 per cent and 9.7 per cent can be expected from July 1 by customers on default market offers, the maximum retailers can charge as spelled out by regulators. NSW customers on standing offers face the steepest price growth of between 8.3 per cent to 9.7 per cent, depending on their network area. Residential customers on default plans in southeast Queensland can expect hikes of anywhere between 0.5 per cent and 3.7 per cent, while people in South Australia face rises of 2.3 per cent to 3.2 per cent. Victorian households can expect a modest one per cent average bump, according to the Essential Services Commission. Prime Minister Anthony Albanese defended his government's energy policies when asked if households were bearing the financial burden of increased network costs to switch to clean energy. 'The cheapest form of new energy is renewables, backed by gas, backed by batteries and backed by hydro for firming capacity,' he told reporters. 'That is the transition that is under way. 'And at the election on May 3, there was the option of stopping all of that, waiting until the 2040s for the nuclear fantasy to be rolled out with costs, unknown of that.' Deputy leader of the opposition Ted O'Brien said electricity prices continued to rise despite 'constant assurances of cheaper power from the Albanese government'. 'The AER identifies high demand, network and power station outages and low renewable generation as the key drivers behind the continued rise in prices,' said the former energy spokesman. 'While the opposition acknowledges it did not meet expectations at the recent election the fundamental issues in Australia's energy market under Labor persist - prices continue to rise.'
