April 16, 2026

Australian dairy sector calls on supermarket chains to increase retail milk prices

Australia's dairy industry is urging major supermarket chains to raise retail milk prices as producers struggle with rapidly rising fuel and fertiliser costs.

Dairy advocacy group eastAUSmilk says the shelf price of a 2-litre bottle of supermarket milk should increase by around 60 cents, equivalent to 30 cents per litre, with at least 10 to 15 cents per litre flowing directly back to farmers.

eastAUSmilk president Tim Bale has formally written to Woolworths requesting a price rise, arguing that the current retail price of A$3.20 (US$2.26) for a 2-litre bottle of private-label milk no longer reflects the true cost of production. Bale said a higher supermarket price would also allow branded milk products to rise in price while remaining competitive within the retail market.

The pressure on dairy producers has intensified following the sharp increase in nitrogen fertiliser costs. The price of urea has roughly doubled in recent weeks as the Middle East conflict continues to disrupt global supply chains. At the same time, higher diesel and petrol prices are increasing costs across every stage of milk production, collection and transport.

Australian Dairy Farmers has also appealed to the federal government for the dairy sector to be classified as a priority fuel user. President Ben Bennett warned that milk's highly perishable nature leaves producers especially vulnerable during fuel shortages. Without reliable diesel supplies, cows cannot be milked, milk cannot be collected and processors cannot maintain supply to retailers and consumers.

The dairy sector's concerns reflect broader pressures across Australian agriculture and food supply chains. Rising fuel costs are also pushing up the price of fish, meat and fresh produce, while fertiliser shortages threaten winter crop production.

Industry groups said urgent government action and supermarket support will be essential to avoid further food inflation and ensure the long-term viability of Australian farming.

- News.com.au