Australian Supermarkets Cut Milk Prices, Sparking Concern Among Dairy Farmers Over Industry Impact

Mark Billing, President of Dairy Farmers Victoria, voiced his apprehension about the impact this price cut could have on farmers, stating, “It's extremely frustrating... margins are really, really tight.” The price reduction has renewed fears about undervaluing milk, especially as Australian milk production has reached a 30-year low, with fewer dairy farms than ever before.

While Coles and Woolworths attribute the price cut to reduced costs fr om milk processors, Australian Dairy Farmers—the industry’s peak body—believes the move is intended to position milk as a “discount leader” to attract customers. Woolworths clarified, “We've reduced the price... to pass on the savings we're receiving from our processors.” However, the timing has raised questions, especially as the Australian Competition and Consumer Commission (ACCC) is currently investigating Coles and Woolworths over alleged misleading discount pricing practices.

As the sector faces ongoing challenges, with Victorian dairy farms decreasing from over 7,000 in 2000 to just under 2,800 today, Billing emphasizes that while farmers are resilient, there is a lim it: “Farmers are resilient, but there's a breaking point.”