Coles seeking extra 155m litres of farmers’ milk for own cheese brand

Coles has broken out of the blocks early, trying to lock in dairy farmers to 2021-22 supply contracts for its milk and cheese.

Coles is contracting more farmers to supply its own-brand cheese Picture: Andy Rogers

Coles is trying to recruit an extra 155 million litres of milk from southeast Australian dairy farmers to process its own-brand cheese.

One southwest Victorian dairy farmer who is working his way through details of the Coles 2021-22 milk supply agreement said “the prices they’re offering are good, but I’m yet to figure out what it comes down to” in dollars per kilogram of milk solids.

The MSA does show Coles is offering flat-priced contracts for up to three years, at the same level as it was paying this season.

Coles Milk minimum price stays flat

As part of its new deal Coles is seeking an extra:

155m litres from Victorian, Riverina and southeast South Australian dairy farmers;

9m litres from NSW farmers;

7.5m litres from Tasmanian farmers; and

2.5m litres from Western Australia (South West Coast) farmers.

Coles dairy general manager Charlotte Rhodes said the supermarket chain currently had more than 60 Australian dairy farms supplying it with milk under direct contracting arrangements.

“By sourcing directly for Coles Brand Cheese we expect to lift this number to around 100 farms across the country supplying us with more than 400 million litres of milk every year.”

Coles will pay Saputo to make the supermarket chain’s cheese under a toll processing agreement.

Coles already has similar processing arrangements in place for its Coles Brand milk sourced directly from farmers in Victoria, Southern and Central NSW, SA and WA, and is in the process of putting a similar structure in place in Tasmania.