Dairy farmers speak out over Aldi, Coles, Woolworths milk price

Dairy farmers across Australia are warning of the farmgate consequences of lowering the retail price of generic milk.

Dairy farmers across Australia are warning of the farmgate consequences of lowering the retail price of generic milk.

While 2024-25 season prices are locked in for the coming eight months, farmers say the first cut to the generic milk price in 13 years will have a knock-on effect to milk cheques once the June 2025 dairy deadline rolls around.

Aldi, Coles and Woolworths all cut the price of generic milk from $1.60 to $1.55 a litre earlier this month, with the two litre price lowered from $3.10 to $3.00 and three-litre bottles from $4.50 to $4.35.

Southwest Victorian farmer Ulke de Kline said milk was one of the few products to decrease in value while on-farm expenses skyrocketed.

“For the past three to four years, the expenses of running a farm have grown considerably,” the Pirron Yallock farmer said.

“Insurance, electricity and fodder are more expensive and those prices will rise again. The green drought in southwest Victoria means getting feed for cattle continues to rise.”

Ulke De Kleine on farm at Pirron Yallock. Picture: Zoe Phillips

Northern Victoria farmer Ann Gardiner said recent supermarket advertisements promoting connections with dairy farmers was “disappointing”.

“I find it really disappointing that the supermarkets cut the price of milk on one hand then use footage of farmers to make themselves look like they’re pro-farmer,” Mrs Gardiner said.

“They say they pay their farmers well but it’s only a handful of farmers and it’s a closed shop. The price drop to $1.55 devalues the entire sector.”

Ann Gardiner with her dairy cows. Picture: Zoe Phillips

Gippsland farmer Jasmine Kneebone said the retail milk discount undercut confidence in the wider industry.

“There are plenty of farmers just hanging in there and when they see a price cut like this they say ‘that’s it, why should I stay in dairy?’,” the United Dairyfarmers of Victoria vice president said. “We have some of the highest on-farm overheads in the world but some of the cheapest milk in supermarkets in the world.

“Workforce costs are going up, electricity, insurance – all inputs are rising.”

What dairy farmers think about the supermarket generic milk price cut.

NSW farmer Graham Forbes said at least $2 per litre for milk was a fair price to pay for both farmers and consumers.

“At two bucks a litre, milk would still be cheaper than most of the soft drinks on sale which can be $3 or $4 a litre for sugar and fizzy water,” the Gloucester NSW farmer said.

“When you take into account inflation from 2010 or 2011, before the dollar a litre milk, it really should be above $2 a litre.”

West Australian farmer Ian Noakes said Aldi, Coles and Woolworths claims of supporting dairy farmers rang hollow when the depreciated the retail value of fresh milk.

“Farmers have one or two-year contracts, so it’s a decision that won’t hit tomorrow or the next day but it has serious medium-term consequences,” he said.

“Processors have got to earn a profit too and they will see this deflation at the retail level and turn around at the next season opening and start with a weaker opening price.

“It’s a sugar hit for the consumer but it’s a damaging move for dairy farmers.”

A Coles spokeswoman said: “We introduced a direct sourcing model for our own brand milk in 2019 to ensure we could provide fair, competitive and guaranteed farmgate prices to dairy farmers directly.

“Through longer-term one, two or three-year contracts, farmers are offered greater security of income so that they can invest back into their farms and make them more sustainable.”

A Woolworths spokeswoman said: “We’ve reduced the price of Woolworths branded milk to pass the savings we’re receiving from our processors on to our customers.

“Milk processors chose to set lower farmgate prices this season, and if we hadn’t reduced the price of our Woolworths brand milk, those supply chain savings would have gone to Woolworths rather than our customers.”

Aldi was contacted by The Weekly Times but declined to comment on the record.