The peak dairy body that represents NSW and Queensland farmers is calling on the supermarket giants to increase home brand milk to $2-a-litre.
It comes as processors had until yesterday to publish their prices for the coming year under the new dairy mandatory code of conduct overseen by the Australian Competition and Consumer Commission.
So far, the dairy price rises range from 5c/L to 12c/L for fresh milk.
Farmers will now have four weeks to negotiate prices offered by processors from Victoria to Queensland whether it's kilograms for milk solids or cents per litre for fresh.
Shaughn Morgan from eastAUSmilk said farmers wanted the major supermarkets to increase the home brand milk from $1.30/L to $2/L so that a percentage would trickle down the supply chain.
In 2011, supermarkets reduced milk to $1/L, which stayed until 2019 when suppliers celebrated a victory in the 'war against $1-a-litre milk' when major retailers increased the price to $1.30/L.
Mr Morgan said farmers originally asked for it to rise to $1.50/L 18 months ago with no increase despite floods and rising inputs.
"At $2/L it enables a larger percentage to be considered to be provided to processors to flow down to farmers," Mr Morgan said.
"It also puts a value on milk ... it has been shown that consumers are willing to pay if they know they are keeping farmers on the land."
With the demise of the drought levee, Mr Morgan wanted to ensure farm-gate milk prices remained at a level so dairy farmers could survive.
In recent times, he said there had been three dairy farmers exit the industry in NSW with five in Queensland and he expected more in northern NSW would consider their position after the floods.
"We are getting to the gritty end, we are no longer in a position for dairy to say it's A-OK," Mr Morgan said.
"The last thing we want to see is go from a pasture driven industry to barn style."
A Woolworths spokesperson said it would continue to consult with its processors for the supply of its own brand milk from July onwards, and would review their retail price on an ongoing basis.
"Farmgate prices are set by processors and the ACCC previously noted in its 2020 Report on Perishable Agricultural Goods that domestic retail pricing strategies are unlikely to have a direct impact on farmgate prices," the Woolworths spokesperson said.
A Coles spokesperson did not comment in regards to the $2/L calls instead referred The Land to a letter the supermarket giant sent out regarding its FY23 milk pool.
It stated farmers need to consider staying on the current Milk Price Purchase Agreement (MPA), move to a new exclusive MPA or move to a new non-exclusive MPA.
"Farmers who elect to supply to Coles under an exclusive MPA will be entitled to a higher minimum price in comparison to a non-exclusive MPA and should refer to their income estimates for further information," the letter stated.
NSW Farmers dairy chair Colin Thompson said dairy farmers were in a relatively positive position, but more needed to be done to strengthen supply chain relationships and the outlook for the industry.
"Sustainable relationships are important, and farmers should work with processors to position their businesses for growth on the back of these prices," Mr Thompson said.
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