Norco Leads Australia with $12.85/kg Milk Price

Norco, Australia's leading dairy cooperative, has set a new benchmark in the nation's dairy industry by announcing a springtime "step-up" that elevates its farmgate milk price to $12.85 per kilogram of milk solids. This move positions Norco ahead of larger rivals such as Lactalis, Saputo, Fonterra, and Bega.

Notably, Norco's projected full-year average price across all regions is anticipated to reach 90.37 cents per liter, marking a significant increase of 1.27 cents per liter compared to the previous season. This price adjustment underscores Norco's commitment to sustaining competitive returns for farmers amidst a challenging market environment.

Two main components are driving this pricing strategy: a quality bonus of 0.5 cents per liter and a cooperative premium of 1 cent per liter. The latter rewards participation in Norco's annual farm data survey, which supports carbon reporting initiatives through the Australian Dairy Carbon Calculator.

The cooperative's CEO, Michael Hampson, emphasized Norco's dedication to balancing profitability and sustainability, contrasting significantly with other southeastern Australian processors that have witnessed a decline in farmgate prices. Australian Dairy Farmers president Ben Bennett praised Norco's proactive approach, stating it's a "fantastic" result that underscores the advantages of farmer cooperatives.

Norco's consistent resilience, despite operational setbacks due to severe floods in New South Wales, raises questions about value distribution within Australia's broader dairy supply chain. This situation puts pressure on corporate processors to reevaluate their business models to retain suppliers.