Australian Dairy Farmers (ADF) has welcomed price support moves by a major supermarket and leading dairy processor to temporarily alleviate the input cost pressures hurting Australian dairy farmers.
ADF understands the developments include a retail-linked milk price increase for Woolworths own brand milk suppliers and a five cent per litre farmer support payment from Lactalis Australia.
ADF President Ben Bennett said while the announcements were positive and a step in the right direction, they each have limitations and do not yet go far enough to address the scale of financial pressure facing dairy farmers.
“These measures are welcome and provide important short-term support, but they do not yet deliver the long-term pricing outcomes all dairy farmers need,” Mr Bennett said.
He said it was critical to recognise Woolworths own brand pricing adjustment applies only to a very small number of farmers supplying into specific contracted milk pools – meaning these benefits will not extend to farmers across most of the market.
“Retail-led increases are often tied to particular supply arrangements, and in this case only a relatively small group of farmers will see a direct benefit,” he said.
ADF also noted that the Lactalis payment, while positive, is a temporary support measure rather than a permanent increase in the farmgate milk price.
“The Lactalis initiative provides valuable short-term relief, but it is not a structural price step-up. Farmers need confidence that improved pricing will be sustained into the future,” Mr Bennett said.
Farmers across Australia continue to face significant increases in input costs, including fuel, fertiliser and feed, placing sustained pressure on farm profitability.
Mr Bennett said there is now a clear need for stronger and more consistent action across the entire supply chain, particularly from retailers through to processors.
“If we are serious about maintaining Australian milk production, retail pricing must better reflect the real cost of producing and processing milk,” he said.
“There is a shared responsibility across processors and retailers to ensure that value is returned through the supply chain in a way that supports farmers.”
ADF is calling for:
- sustainable farmgate pricing aligned with cost of production;
- greater transparency in how value flows from retail to farmgate; and
- stronger and more consistent retail pricing signals to support farmer confidence and investment.
“Short-term support helps, but what farmers ultimately need is long-term pricing certainty and a fair return for the milk they produce.”
ADF will continue to work constructively with processors, retailers and government to achieve a more sustainable future for the dairy sector.