In short:
Processors published supply agreements for the 2025-26 financial year earlier this week, as part of the Dairy Industry Code of Conduct.
WAFarmers Dairy Council president says stagnant farmgate prices have left farmers disillusioned.
What’s next?
A South West dairy farmer is asking processors to review their offers after a processor conceded to a 2-cent-per-litre increase on its original price.
West Australian dairy farmers say they are disappointed by the ongoing stagnation of farmgate milk prices as repeated dry seasons and rising costs take a toll.
Processors recently published their 2025-26 supply agreements as part of transparency measures in the Dairy Industry Code of Conduct.
For the third successive year, farmers say WA processors have offered no substantive price increase.
The disappointment was shared by interstate producers, whose processors have offered slight increases.
Dairy farmers in WA’s South West have called on local milk processors to review their offers, with one major processor, Bega, already conceding to a two-cent-per-litre rise.
Brunswick dairy farmer Michael Partridge said the initial price offered by Bega was not enough.
Michael Partridge is urging processors to lift farmgate prices. (ABC Rural: Jon Daly)
“Prices haven’t moved for three and a half years; last year was a really hard year for farmers in Western Australia,” he said.
“The Dairy Farm Performance Program, which Dairy Australia did, showed 50 per cent of dairy farmers made a loss, and there was an average 2 per cent return on investment, and the prices didn’t move, which was extremely disappointing.”
2 cents pay rise
Though 2-cents-per-litre extra from Bega was not enough, Mr Partridge said it was a start.
“I was pleased to hear that Bega has announced a 2-cent price rise, but it’s not enough to turn the industry around,” he said.
He called on other big processors to do the same.
Farmgate milk prices were released earlier this week by Australian processors. (ABC Rural: Jane McNaughton)
“We really need the other two processors, Brownes and Lactalis, to follow suit, and push it further,” he said.
“We’ve had a terrible start to the season, bugger all rain — and this 2 cents is certainly going to help buy the eight road trains of hay I’ve needed to get the season on the way.”
Expecting reasonable increase
WAFarmers Dairy Council president Ian Noakes, who also runs a dairy in the south west of the state, said the stagnation of pricing ignored the fact that production costs had risen substantially for dairies.
“Anybody in business would know how much costs have increased in business in the past years,”
Mr Noakes said.
Mr Noakes said his lobby group was seeking a 5-cent increase to support farmers to be profitable.
He said WA’s average farmgate price ranged between 60-70 cents per litre, and that pricing hadn’t materially changed in the last three years.
Ian Noakes says it would be good to see Brownes back in Australian hands. (ABC South West WA: Anthony Pancia)
While East Coast dairies had access to overseas export markets, WA’s dairy farmers were constrained to a comparatively small, local market.
For that reason, Mr Noakes partially blamed the major supermarkets’ low-priced home brand milk ranges for the subdued pricing offered by WA processors.
“If our supermarkets want to sell the WA dairy industry down the drain, they’re doing a good job of it,”
he said.
Mr Noakes recently presented to an ACCC inquiry into Australia’s major supermarkets, urging the regulator to recognise the damage of home brand milk ranges.
WA dairy producers can only sell to local suppliers. (ABC Rural: Emma Field)
Coles responds
The ABC contacted WA’s major dairy processors for comment, of which Coles was the only one to respond.
“We introduced a direct sourcing model for our own brand milk in 2019 to ensure we could provide fair, competitive and guaranteed farm gate prices to dairy farmers directly,” a Coles spokesperson said in a statement.
“Our multi-year agreements for our direct supply dairy farmers aim to support them in longer-term planning, and as part of the process of setting these agreements, we consider a range of factors including supply volumes, customer demand, farm production costs, and dairy market condition,s including commodity prices.”
Harvey Fresh’s parent company, Lactalis, declined to comment, and Brownes and Bega were yet to respond.
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