Coles increases price of its own brand milk
In this article (4)
Mr Forbes, who is a dairy farmer based at Gloucester on the Mid North Coast of New South Wales, said farmers had been facing higher input prices, including for items such as diesel and fertiliser.
“It means our profit margins have been reduced,” he said.
“I think we were probably in a stronger position even last year … we’re certainly chasing that inflation at the moment.”
He said floods and wet weather had also impacted farmers.
“I think milk on the north coast is back over 20 percent at the moment to what it was last year, and we had a flood year last year as well,” he said.
“Production throughout the whole country is being suppressed, I think we’ll see June figures probably in excess of 10 per cent, that the Australian production will be down across all states.
“So there’s a real shortage of milk there now and huge demand for that milk.”
Ben Geard, from Geard Family Farms in southern Tasmania is a Coles supplier, and said the jump in the price of Coles milk “was bound to happen”.
“Milk prices for farmers have seen quite a considerable increase this year so, it was probably only inevitable that Coles and other processors are going to try to recoup their costs,” he said.
“It’s not great for customers although milk has been undervalued for quite a while when you compare it to some of the other staples — water, soft drink, and that sort of thing.
“I think we were probably in a stronger position even last year … we’re certainly chasing that inflation at the moment.”
“We were at a dollar a litre there for some time and that ended nearly two years ago.”
Mr Geard said “that was a good thing”.
“$1.60 I still think that’s still pretty reasonable for a litre of milk,” he said.
“It’s not good these prices just increasing for 12 months.”
Mr Geard said prices needed to remain competitive with other industries if dairy farmers were going to stay in the industry.
He said it cost a considerable amount to produce a litre of milk, with fertiliser increasing by 30–40 per cent.
“We’ve got to use a lot of fertiliser on the grass and this time of year we’re feeling a lot of grain in the dairy to make sure we’ve got milk through the winter,” he said.
“As good as the prices are this year there’s definitely a lot of payments going out as well.”
Questions & Answers
Q.Why have farmers' profit margins been reduced recently?
Why have farmers' profit margins been reduced recently?
Farmers have faced higher input prices for items like diesel and fertiliser, which has impacted their profit margins. Floods and wet weather have also affected production levels across the country.
Q.What is causing the current shortage and high demand for milk?
What is causing the current shortage and high demand for milk?
Milk production on the north coast is down over 20 per cent compared to last year, and Australian production is expected to be down by more than 10 per cent across all states, creating a shortage.
Q.How much has fertiliser increased in price, according to the article?
How much has fertiliser increased in price, according to the article?
Fertiliser has increased in price by 30-40 per cent. This significantly adds to the cost of producing milk, as farmers need to use a lot of it for grass.
Reader pulse
Coles' milk price increase: fair or not?
19,767 votes so far