THIS week's price-increase offer from dairy co-operative Norco to its drinking milk suppliers won't go far enough to stop the exit of producers from the industry, says Gloucester dairyman and vice-chair of lobby group eastAUSmilk.
Norco Co-operative. Pic: Lindsay Moller Photography

The Norco announcement of a 5 cents a litre co-operative premium payment for the next two months – coming on top of average base milk prices of around 70c/l – pales in comparison to what is needed in the wake of “unprecedented inflation” for farm inputs, he said.

“This is not a base price payment,” he said, pointing out the premium equated to 0.7c/l for a 12 month period. “Norco has not lifted the base price.”

Mr Forbes said the dairy community were frustrated by Bega’s recent offer of 6c/l for central NSW and a paltry 5c/l for Queensland drinking milk suppliers, considering the component price of southern dairy farmers had soared $150/kg (about 12-14c/l) on the back of better world commodity prices.

There was some expectation from Parmalat suppliers that they might receive a substantial increase in the order of 12-15c/l to meet the rise of doing business but in the wake of Bega’s offer that hope has been diminished.

“We have always been told that the Queensland drinking milk price should be based on the Victorian price plus freight,” said Mr Forbes. “If we don’t go to 15-20c/l more for our milk we will lose farmers in droves.”

Farmers are now calling on supermarkets to raise the price of milk to $2/l to guarantee production of local fresh dairy.

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