The unprecedented escalation of input costs and weather extremes is threatening the existence of many coastal farms and the future supply of fresh milk.
NSW Farmers is encouraging dairy farmers to work with processors to secure the best farmgate deal possible for their milk, with the deadline for processors to publish their supply contracts around the corner.
June 1 marks the third time dairy processors have been required to publish their standard supply agreement under the Dairy Code of Conduct, which was introduced in January 2020 to improve transparency between farmers and processors.
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.
“After a prolonged period of drought and low retail prices, dairy farmers are finally seeing a change in tide,” Mr Thompson said.
“Reduced supply is driving up the milk price across the state, which is positive for farmers, but we must still fight to ensure prices are equitable along the supply chain.
“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 the retail price of dairy products would likely need to be increased to promote sustainability in the dairy supply chain, particularly with skyrocketing input costs and climate challenges.
“For too long, dairy farmers have faced stagnant retail prices, and NSW is particularly exposed to this because of the high proportion of fresh milk produced here,” he said.
“The unprecedented escalation of input costs and weather extremes is threatening the existence of many coastal farms and the future supply of fresh milk.
“Much of NSW has experienced a rolling natural disaster with over three metres of rainfall in the last five months.”
Mr Thompson said retail prices influenced profit margins for both processors and farmers.
“While we acknowledge everyone is feeling the cost-of-living squeeze at the moment, small increases at the checkout would go a long way for farmers in planning for their future,” he said.
“The sustainability of the dairy industry also shapes consumers’ enjoyment of Australian dairy products for years to come.”
-NSW Farmers