NSW floods likely to force up drinking milk retail prices

NSW has been hit by floods and most of southern Australia by drought. What impact will it have at the supermarket checkout?

Generic supermarket milk brands will be forced to raise prices higher than the current $1.55 a litre, following floods that hit Australia’s fresh milk supply centre.

eastAUSmilk president Joe Bradley said the “ultra low price of generic milk looks even more like a pricing outlier” following the NSW floods, coupled with the drought across Victoria, South Australia and Tasmania.

In October 2024, Aldi, Coles and Woolworths all cut the price of generic milk from $1.60 to $1.55 a litre, with the two litre price lowered from $3.10 to $3.00 and three-litre bottles from $4.50 to $4.35. All three supermarkets cut the price of generic brand milk to $1 a litre in January 2010, leave the low price in place until 2019.

“If dollar a litre milk never happened, we’d be talking about a generic milk price of $2.50 at least- based on inflation,” Mr Bradley, a Brisbane region dairy farmer, said.

“Between Sydney and Brisbane is Australia’s fresh milk region and everyone knows about the hammering a big slab of that part of the world has got in the past fortnight.

“We’re talking about herds that have literally been swept out to sea.”

Norco chief executive Michael Hampson said dairy inflation would not be isolated to generic milk prices, with a range of produce from all brands and processors likely to be impacted by flood and drought.