Processors slash opening milk price sparking fears of industry exits

Dairy farmers have warned many in the industry could be forced out of business as several processors slash opening milk prices for the 2024-25 season.

NSW saw a mixed bag of milk prices posted this week, with many processors reducing their opening milk prices by up to 15 per cent for NSW dairy farmers this season.

NSW Farmers Dairy Committee Chair Phil Ryan said the price drops had come as high input costs and competing land use priorities continued to place extreme pressure on dairy producers, forcing many to reconsider their future in the industry.

“These prices are a fresh hit to farmers already grappling with huge pressures on production, from labour shortages and interest rates to fuel costs and electricity prices,” Mr Ryan said.

“Other sources of income for dairy farmers are also drying up, with low cattle prices and an export heifer market – which has supported many in the industry over the past decade – now almost non-existent.

“The cost of these milk price cuts is likely to exceed $600 million dollars in the next financial year, and this will have huge flow-on effects in our regional economies and communities, with job losses already being reported.”

While some of the state’s dairy farmers will be insulated from these changes through longer term milk supply contracts, Mr Ryan said there were significant concerns that these prices could have broader effects as contracts expired.

“As lower prices force farmers out of the industry, we are seeing a significant increase in butter and cheese being imported into Australia from New Zealand, the USA and Europe,” Mr Ryan said.

“This reliance on imported products will no doubt impact our nation’s food security, and also have significant environmental impacts as a result of increased freight moving forward.

“We want to keep fresh, local, healthy Australian dairy products on Australian tables – but ultimately, we need Australia’s support to do so.”

-NSW Farmers