May 31, 2023

Lactalis Australia reduces farmgate milk price, dairy farmers concerned

Dairy farmers in Australia's Queensland and New South Wales have voiced their dismay and frustration following the announcement of a farmgate milk price reduction by milk processor Lactalis Australia from AUD 0.87 (~US$0.56; AUD 1 = US$0.65) to AUD 0.82 (~US$0.53) per litre, Australian Broadcasting Corporation reported.

EastAUSmilk CEO Eric Danzi said that farmers were expecting an increase in milk prices due to a significant reduction of half a billion litres in milk production across Australia in the past year.

Danzi strongly urged Lactalis suppliers to assert their power by engaging with other major processors.

While other companies Norco and Bega are yet to disclose their milk prices for the upcoming financial year, they are legally required to do so by June 1, 2023.

Danzi expressed scepticism about the possibility of competitors reducing their prices, stating that any increase less than three cents would be merely symbolic and insufficient to meet farmers' expectations.

The announcement of the price drop has had a profound impact on individual farmers. Peter Graham, a dairy farmer from Codrington in the Northern Rivers, described it as an "absolute shock" and estimated a loss of approximately AUD 65,000 (~US$42,000) for his operation.

He said this reduction will compel many farmers to re-evaluate their future in the industry.

The decline in milk prices is a significant blow, considering the recent challenges faced by dairy farmers. Despite favourable seasons in Queensland and New South Wales, the industry has grappled with the aftermath of flooding and rising costs, resulting in a number of farmers leaving the sector nationwide.

-      Australian Broadcasting Corporation