NSW dairy co-operative Norco has bucked the trend in farm gate milk prices by announcing it is holding its record high price for this coming season’s opening.
Norco chief executive officer Michael Hampson said the co-operative was announcing an average milk price of 89.5¢/litre for the company’s northern NSW and Queensland farmers.
“Despite much conjecture regarding milk price reductions and downward pressures facing the market, Norco — a proudly 100 per cent Australian farmer-owned co-operative — is pleased to be able to maintain its record high milk price due to the ongoing support received from loyal customers,” Mr Hampson said.
He said despite the challenging economic environment, these pricing decisions represented a continued commitment by the co-operative to actively support its 281 farmer members in any way it can.
“Norco values the hard work of our farmers and the sheer dedication that goes into putting high-quality milk on supermarket shelves, and the best way we can show them that is by paying a strong price for their product,” he said.
“Equally, the best way consumers can continue to support our hard-working dairy farmers is to keep choosing Norco when doing their weekly shop.
“And it would appear that shoppers are heeding this message, with sales of Norco branded milk continuing to grow, despite the challenging environment.
“Norco will continue to review options over the course of the year to increase milk prices to our farmers, as we have demonstrated in previous years by improving our price after the season has commenced.”
For hundreds of other farmers, the prices being offered by Saputo and Fonterra are up to $1/kg MS less than last year’s opening minimum, and a NSW farmers association warns it might lead to some farmers leaving the industry.
NSW Farmers Dairy Committee chair Phil Ryan said the price drops had come as high input costs and competing land use priorities continued to place extreme pressure on dairy producers, forcing many to reconsider their future in the industry.
“These prices are a fresh hit to farmers already grappling with huge pressures on production, from labour shortages and interest rates to fuel costs and electricity prices,” Mr Ryan said.
“Other sources of income for dairy farmers are also drying up, with low cattle prices and an export heifer market — which has supported many in the industry over the past decade — now almost non-existent.
“The cost of these milk price cuts is likely to exceed $600 million in the next financial year, and this will have huge flow-on effects in our regional economies and communities, with job losses already being reported.”
While some NSW dairy farmers will be insulated from these changes through longer-term milk supply contracts, Mr Ryan said there were significant concerns these prices could have broader effects as contracts expired.
“As lower prices force farmers out of the industry, we are seeing a significant increase in butter and cheese being imported into Australia from New Zealand, the US and Europe,” he said.
Victorian dairy leaders have also warned the new prices offer little incentive to suppliers to increase production volumes.
ACM, based at Girgarre in northern Victoria, has announced a forecasted price range of $7.80 to $8.20/kg MS.
The company cited a volatile nature of the markets over the past 12 months combined with the favourable weather conditions and increased milk supply as impacting on operations this year.
ACM executive chairman Michael Auld said increased imports, cost of living pressures and increased local milk supply had all impacted the domestic supply chain.
“We have experienced a significant disconnect between global commodity values and domestic farm gate milk prices leaving dairy ingredients from Australia at a competitive disadvantage in all markets,” Mr Auld said.
“We continue to see large producing regions like EU and the US slow milk production due to various factors.
“As demand signals improve, we believe this will have a positive farm gate price impact both in financial year 2025 and the longer term for ACM and our suppliers.”
Mr Auld said the forecasted range represented the majority of suppliers and some might fall outside of this range based on size and production profile.