Australian dairy farmers seek higher milk prices amid fuel and fertiliser cost surge
Australian dairy producers are warning that output could weaken unless higher fuel and fertiliser costs are reflected in milk prices and broader support reaches farms.
Australian dairy farmers are pushing for higher retail milk prices as rising fuel and fertiliser costs squeeze margins and threaten output. ABC reported that eastAUSmilk, which represents dairy producers in Queensland and New South Wales, believes milk prices need to increase if farms are to absorb higher transport and fertiliser bills. Without that adjustment, the group says farmers will slow production and market supply will tighten.
EastAUSmilk president and dairy farmer Tim Bale said the immediate problem is not physical shortages of fuel or fertiliser but the scale of the price increase. In some cases, costs have more than doubled. Farmers are already cutting back on urea use, which reduces pasture growth, limits how many cows can be milked and ultimately lowers milk production. Bale also cited examples of farms considering layoffs and herd reductions of around 100 cows in order to contain losses.
The group is asking for a 30 cent per litre increase in retail milk prices to help the sector cope with the cost shock tied to conflict in the Middle East. South Australian Dairyfarmers' Association president Rob Brokenshire said shortages were not inevitable, but he warned that keeping enough production in the system would require producers to shoulder very high input bills. He added that drought had already cut South Australian dairy production by about 6 percent over the past 12 months.
The industry is also working from a weaker long-term base. Dairy Australia puts current national milk production at around 8 billion litres, far below New Zealand's roughly 21 billion litres. Australian Dairy Products Federation chief executive Janine Waller said government support and co-investment could help the sector avoid supply gaps, stressing that every drop of milk counts. She also urged consumers to back local dairy products as part of maintaining domestic supply.
Farmers on the ground describe the current pressure as one more shock after years of difficult conditions. DairySA chair Andrew Cavill said fuel, fertiliser, chemicals, cow drugs and seeds had all become more expensive and harder to source. South Australian farmer Mandy Pacitti said tractors can run four to five hours a day just mixing feed, making diesel costs especially painful for dairy businesses that cannot simply pass the increase along on their own.
Retailers acknowledged the pressure but stopped short of committing to a simple fix. Woolworths said it was trying to balance supplier viability with the impact on shoppers, while ALDI said it was monitoring the situation and working with partners. For producers, however, the message is that input inflation is already changing farm decisions. If energy and agri-input costs remain high for an extended period, the sector could face a period of weaker milk supply even while consumer demand stays firm.