NSW dairy leader Graham Forbes predicts dairy price trend
It’s fast becoming a reality that the price of generic milk may hit $2 a litre – which is still ‘cheap’ according to a NSW dairy leader.
The price of generic milk may hit $2 a litre by the end of they year, matching a prediction by a NSW dairy leader.
In March, eastAUSmilk vice chairman Graham Forbes said $2 a litre for generic milk was needed to cover the cost of primary production.
“Two dollars a litre for milk is still very cheap,” Mr Forbes said in March.
“You pay more per litre for soft drink or sparkling water. Throughout the dollar-a-litre years, we were always were pretty reasonable. We’d say $1.40 a litre or $1.50 a litre was about where the price needed to be.”
In July, Aldi, Coles and Woolworths all raised the price of generic milk from $1.35 to $1.60 for one litre containers, while a two-litre bottle had a price hike from $2.60 to $3.10.
Fast forward to November, and Mr Forbes said inflationary pressures meant his March prediction was likely to come true in coming months.
“People laughed at the time about raising the price to $2 a litre,” he said.
“But it’s looking like it could happen sooner rather than later.
“Electricity prices are going through the roof and the floods have had a huge impact on dairy delivery in both NSW and Victoria.”
Generic milk at $1 a litre was introduced by Coles and Woolworths in January 2011 and lasted until 2018, when both raised prices to $1.10, then $1.20 a litre the following year.
United Dairyfarmers of Victoria president Mark Billing said $2 a litre for generic milk reflected market realities.
“We often said during the dollar a litre debate that if prices really reflected inflation, then it would have been two dollars years ago,” he said.
“Horticulture adjusts their prices pretty quickly with fruit and veg and rightly so. We can’t live on with fantasy prices when the reality is that making milk is much more expensive than it was at the start of the year.”