Aussie shoppers will be forced to pay record-high prices for dairy products as the farming industry is set to produce its lowest volume of milk in 30 years.
Farmgate prices hit an all-time high of $9.93kg per milk solid in the 2022 to 2023 season, according to Dairy Australia – a national services body for the Australian dairy industry.
While prices have fallen back to $9.44kg per milk solid, they are still 40 per cent above the five-year average, causing prices to surge on supermarket shelves.
Last week, Coles ‘reluctantly raised’ the price of its own-brand milk by 10 cents, with shoppers paying $1.70 for one litre and $3.30 for two litres.
The supermarket giant told Daily Mail Australia the price hike was due to ‘ongoing cost increases in the supply chain‘.
Aussie shoppers will be forced to pay record high prices for dairy products as the farming industry is set to produce its lowest volume of milk in 30 years
While prices have fallen back to $9.44kg per milk solid, they are still 40 per cent above the five-year average, causing prices to surge on supermarket shelves
‘We have reluctantly raised the price of Coles Own Brand milk by 10 cents a litre due to ongoing cost increases in the supply chain,’ Coles said.
‘We don’t take the decision to raise prices lightly, particularly because of the increased cost-of-living pressures faced by our customers.’
The increase marks a 21 per cent price jump in just over a year, making local products unaffordable for Aussies struggling with the cost of living.
Dairy Australia noted the jump in its latest report on the industry, claiming dairy prices have ‘increased at the fastest rate compared to all other food groups’.
Supermarket prices remained steady for an eight-year lull after Coles, Woolworths, and Aldi slashed prices to $1 a litre in 2011.
However, farmers warned the low milk price would cause some dairy producers to leave the industry.
When $1 milk was introduced, 2,350 farm businesses left the industry, and milk production dropped by about 1 million litres, according to Dairy Australia data.
The peak body explained price hikes are likely to continue as supply decreases, with national milk production set to drop a further 3 to 4 per cent to 7.8 billion litres.
Now, fewer than 4,000 farmers are left in the dairy industry.
South Gippsland farmer Benjamin Vagg is one of the dairy farmers still enthusiastic about the industry.
The 34-year-old wakes up at 5.30am, seven days a week, and tends to his 420 cows, which are milked every afternoon.
‘We have some of the best dairy farmers in the world In Australia,’ Vagg told 9News.
Mr Vagg added he can’t sell his milk for much less as his production costs have also increased.
He added it was ‘about time’ manufacturers pay farmers ‘top dollar’ for his produce but admitted the flow-on effect would be harder for shoppers.
South Gippsland dairy farmer Benjamin Vagg said it was ‘about time’ manufacturers pay ‘top dollar’ for produce but admitted the flow-on effect would be hard for shoppers
ANZ’s Agro-Insights Michael Whitehead said Australian milk production had fallen every year, with 2023 set to be the lowest in 30 years.
‘We’ve got the same number of dairy processing companies, so they have to compete to get an ever-shrinking supply of milk,’ Mr Whitehead said.
‘That pushes up the cost, which cuts their margins and means higher prices at the supermarket.’
As prices increase, Aussies will be forced to away from Australian-made dairy products and towards cheaper imported produce.
The amount of New Zealand diary in Australia is almost 30 per cent higher than it was in 2022.
‘It’s absolutely happening now. Two out of the top four butter brands in Australia right now are imported,’ Mr Whitehead said.
Source: | This article originally belongs to Dailymail.co.uk