Milk and Money: Norco Announces Record Price Milk Suppliers, But Producers Still Under Pressure

Milk processors increase the amount they pay for milk, with Norco informing its dairy farmers about a record price increase.

It comes at a time when both the processor and its milk suppliers are struggling after the catastrophic flooding that hit the Northern Rivers and south-east Queensland three months ago.

EastAUSmilk vice president and Norco supplier Graham Forbes said it was a great decision by the cooperative.

“It’s going to bring the milk price to between 83 and 85 cents a liter,” he said.

Norco is currently facing challenges of its own, with its ice cream factory, headquarters and country store in South Lismore suffering damage during the February 28 flood.

At least half of Norco’s 200 farms in northern New South Wales and Queensland were also affected, with livestock lost and fences, pastures, machinery, homes and dairies destroyed.

At least 200,000 liters of milk were dumped because tankers were unable to access farms to collect it.

Mr Forbes said it has been a “horrible” time for farmers, and it has been made worse by rising production costs in general.

“The fertilizer is up 250 percent, the fuel is up 100 percent, everything is up 25 to 30 percent,” he said.

He was also critical of other milk processing companies.

“Some of the other processors have had a meager price increase and others have not even seen a price increase,” he said.

Prices up, but not enough

Milk processor Lactalis has announced a nine cents per liter increase for the northern milk market and a new milk bonus, which Mr. Forbes backed, but said it was disappointed with the five cents per liter increase announced by Bega Cheese.

He finds it especially disappointing given that Andrew “Twiggy” Forrest recently bought a 9 percent stake in Bega.

“It’s really disappointing to see one of the richest people in Australia investing in Bega… and Bega coming out so low,” he said.

“I don’t know what their methodology is, but I hope people like Twiggy Forrest have a better appreciation for the farmers who provide the milk.”

The Canadian company Saputo has not yet announced its price for its northern suppliers.

Under the new industry code of conduct, dairy processors are required to publish their minimum milk price before June 1 each year.

Coles follows

Supermarket chain Coles has increased its price, even though their suppliers are tied to a three-year milk price contract.

Supplier Dave Jones from Tasmania’s Derwent Valley said he appreciated the move.

“They don’t have to do anything, but they did it, which is very nice,” he said.

Three dairies supply all of the fresh milk needed for Coles Supermarkets in the state, and Mr Jones said the price increase was a welcome relief from high input costs.

Neither Coles nor their suppliers said how much they would get, but Mr Jones said it was high.

“It’s more than what the other guys offer,” he said.

But according to Forbes, more was needed.

He said he wanted the new federal government to look at ways to make the industry sustainable to stop the exodus of dairy farmers.

“In ten years we will have no industry in Queensland,” he said.

“We all need to make a profit from milk and if we don’t, our industry will not survive.”