Milk price on the rise

Dollar a litre milk is well behind us now. It looks like milk price will start following the general laws of economics responding to supply and demand. Last week Woolworths lifted its milk price to $1.30/L on its 2L and 3L bottles.

Coles has since followed suit and lifted their milk price to $1.30/L.

Of course, it is not the first time Woolworths have led the way in raising milk price. Starting with breaking $1/L milk to $1.10/L in February 2019 and later to $1.20/L in the same year.

It is very positive to see the price of milk on the rise, it should flow through the supply chain and lead to a more sustainable industry.

The dairy industry needs to continue to move towards a direction where the whole supply chain makes a moderate margin for it to be viable and worthwhile remaining in the industry. It is necessary for the retail price to rise to allow this to occur.

Australian milk production has been trending downwards in the recent years. This has been due to substantial increases in the cost of production as a result of the drought and more recently fuel and fertiliser prices. It is expected now that as costs increase there can be adjustment to retail prices to allow farmers to be paid a fair price and continue to produce milk.

Improving the margin between the cost of production and farmgate milk price will allow farmers to invest in the future of their business and encourage the next generation to remain in the industry.

QDO thanks Woolworths for its continued leadership in the dairy industry supply chain. This leadership will help create a sustainable industry and a positive future. Dairy farmers would like this trend to continue so that everyone can have a prosperous future.

Brian Tessmann, QDO President