Aussie shoppers and farmers struggle as milk production hits three-decade low
- Replies 4
Dear members, especially those who regularly purchase milk from supermarkets, we have an important heads-up for you.
Australia is reportedly experiencing its lowest volume of milk production in over three decades, and unfortunately, it's your wallet that's going to feel the impact.
According to Dairy Australia, the national authority for Australian dairy products, farmgate prices reached an all-time high of $9.93 per kilogram of milk solids in the 2022-2023 season.
Although prices have since dropped back to $9.44 per kilogram of milk solids—40 per cent above the five-year average—shoppers will still be hit with record-high prices at the supermarket.
Recently, we reported that Coles raised the prices of their 3L cartons (now $4.80), 2L cartons (now $3.30), and 1L bottles (now $1.70) of milk by 10 cents per litre, resulting in an 80-cent increase in just over a year.
According to a spokesperson, this price hike was prompted by ongoing cost increases in the supply chain.
'We don't take the decision to raise prices lightly, particularly because of the increased cost-of-living pressures faced by our customers,' they said.
After Coles, Woolworths, and ALDI slashed milk prices to $1 per litre in 2011, supermarket prices remained stable for eight years.
However, farmers had warned that the low milk prices would force some dairy producers to exit the industry.
And their concerns were not unfounded. When $1 milk was introduced, it led to the departure of 2,350 farm businesses, causing milk production to decline by approximately 1 million litres, as reported by Dairy Australia data.
The industry's peak body has explained that price increases will likely persist due to a decrease in supply. National milk production is projected to drop by an additional 3 to 4 per cent, reaching 7.8 billion litres.
Today, the dairy industry is left with fewer than 4,000 farmers, highlighting the lasting impact of the price reductions introduced in 2011.
Despite economic headwinds, Benjamin Vagg, a 34-year-old farmer from South Gippsland, remains passionate about the dairy industry. He said: 'We have some of the best dairy farmers in the world in Australia.'
He explained that he cannot lower the price of his milk because his production costs have also risen. He believes it's high time manufacturers paid farmers top dollar for their produce. However, he does acknowledge that this may lead to challenges for shoppers.
Michael Whitehead, ANZ's Head of Agri Insights, pointed out that Australian milk production has been steadily decreasing each year, and 2023 is expected to mark the lowest output in three decades.
As prices continue to climb, many Aussies may soon shift away from locally produced dairy products in favour of more affordable imported alternatives.
'It's absolutely happening now,' said Mr Whitehead.
Members, this news may not shock many of you, who have already experienced sky-rocketing prices in the dairy section at your local supermarket. Despite this, it's still necessary to remain vigilant as prices are seen to continue rising as the supply decreases.
Do you have any tips and tricks for saving money on dairy products? Feel free to share them with us in the comments below.
Australia is reportedly experiencing its lowest volume of milk production in over three decades, and unfortunately, it's your wallet that's going to feel the impact.
According to Dairy Australia, the national authority for Australian dairy products, farmgate prices reached an all-time high of $9.93 per kilogram of milk solids in the 2022-2023 season.
Although prices have since dropped back to $9.44 per kilogram of milk solids—40 per cent above the five-year average—shoppers will still be hit with record-high prices at the supermarket.
Recently, we reported that Coles raised the prices of their 3L cartons (now $4.80), 2L cartons (now $3.30), and 1L bottles (now $1.70) of milk by 10 cents per litre, resulting in an 80-cent increase in just over a year.
According to a spokesperson, this price hike was prompted by ongoing cost increases in the supply chain.
'We don't take the decision to raise prices lightly, particularly because of the increased cost-of-living pressures faced by our customers,' they said.
After Coles, Woolworths, and ALDI slashed milk prices to $1 per litre in 2011, supermarket prices remained stable for eight years.
However, farmers had warned that the low milk prices would force some dairy producers to exit the industry.
And their concerns were not unfounded. When $1 milk was introduced, it led to the departure of 2,350 farm businesses, causing milk production to decline by approximately 1 million litres, as reported by Dairy Australia data.
The industry's peak body has explained that price increases will likely persist due to a decrease in supply. National milk production is projected to drop by an additional 3 to 4 per cent, reaching 7.8 billion litres.
Today, the dairy industry is left with fewer than 4,000 farmers, highlighting the lasting impact of the price reductions introduced in 2011.
Despite economic headwinds, Benjamin Vagg, a 34-year-old farmer from South Gippsland, remains passionate about the dairy industry. He said: 'We have some of the best dairy farmers in the world in Australia.'
He explained that he cannot lower the price of his milk because his production costs have also risen. He believes it's high time manufacturers paid farmers top dollar for their produce. However, he does acknowledge that this may lead to challenges for shoppers.
Michael Whitehead, ANZ's Head of Agri Insights, pointed out that Australian milk production has been steadily decreasing each year, and 2023 is expected to mark the lowest output in three decades.
As prices continue to climb, many Aussies may soon shift away from locally produced dairy products in favour of more affordable imported alternatives.
'It's absolutely happening now,' said Mr Whitehead.
Key Takeaways
- Australian shoppers are set to face record-high prices for dairy products as the farming industry is anticipated to produce its lowest volume of milk in 30 years.
- The pricing of milk has significantly increased, with Coles raising the price of its own-brand milk by 10 cents, attributing the price hike to 'ongoing cost increases in the supply chain'.
- As dairy prices rise, consumers will likely shift away from Australian-made dairy products and move towards cheaper imported produce.
Members, this news may not shock many of you, who have already experienced sky-rocketing prices in the dairy section at your local supermarket. Despite this, it's still necessary to remain vigilant as prices are seen to continue rising as the supply decreases.
Do you have any tips and tricks for saving money on dairy products? Feel free to share them with us in the comments below.