Milk prices will soar by up to 30c a liter as production shortfall hits Australia

Buyers could pay up to 30 cents more for a liter of milk in the coming weeks as Australia’s dairy industry is crippled by a production shortfall.

A mix of widespread rainy weather, rising production costs, labor shortages and an exodus of farmers from dairy farming have been blamed for the price hike.

Rabobank’s senior dairy and consumer food analyst Michael Harvey told Daily Mail Australia that production was below 350 million litres.

Buyers could pay up to 30 cents more for a liter of milk in the coming weeks as Australia’s dairy industry hits a production shortfall (stock image)

Dairy and consumer food expert Michael Harvey (pictured) of Rabobank said a slow recovery could be on the way as recent rains have brought greener fields and full dams in farming areas.

Dairy and consumer food expert Michael Harvey (pictured) of Rabobank said a slow recovery could be on the way as recent rains have brought greener fields and full dams in farming areas.

“There have been flood-related milk losses in Queensland and New South Wales and seasonal conditions have been unfavorably wet in other areas such as parts of Tasmania and Victoria,” he said. he declares.

“It has had an impact on food availability and quality.”

Mr. Harvey said labor availability issues and ongoing farm closures had dealt a further blow to the industry.

“That’s why production declines are widespread,” he said.

“I think we are in a period of high food inflation and this will include higher prices for dairy products in most categories.

“The simple reason being that the drivers of high prices are still in play. High cost of production, firm commodity markets and high packaging and distribution costs.

Production issues affecting milk production are also expected to increase the price of other dairy products such as butter, cheese and yogurt.

“We expect (and are already seeing) higher prices across all categories and geographies,” Harvey said.

Production issues affecting milk production are also expected to impact the price of other dairy products such as butter, cheese and yoghurt (stock image)

Production issues affecting milk production are also expected to impact the price of other dairy products such as butter, cheese and yoghurt (stock image)

Rabobank's senior dairy and consumer food analyst Michael Harvey told Daily Mail Australia that production was less than 350 million liters (stock image)

Rabobank’s senior dairy and consumer food analyst Michael Harvey told Daily Mail Australia that production was less than 350 million liters (stock image)

“Dairy consumers around the world pay a lot more for milk and cheese.

“Labour shortages are a key issue for Australian dairy farmers. There’s also an element of lifestyle choice with some older farm owners just wanting to hang out.

“And there is also an element of strong competition for resources and capital from other agricultural sectors such as livestock.”

Shaughn Morgan, dairy farmer advocate for eastAUSmilk, told ABC the sector is under a lot of pressure and these workers have no choice.

“There is a continuing decline in the number of dairy businesses, with many dairy farmers and their families deciding enough is enough,” he said.

Bianca Woodford runs a dairy in west Brisbane and said the price hike was needed to cover her costs.

She hoped buyers would understand the industry’s need to raise prices.

“It’s definitely about tracking these price increases on our end to support our business,” she told ABC News.

Milk is the latest staple to rise during Australia's cost of living crisis as households are forced to pay sky-high prices for groceries, petrol and electricity (stock image)

Milk is the latest staple to rise during Australia’s cost of living crisis as households are forced to pay sky-high prices for groceries, petrol and electricity (stock image)

Vegetables, fruit, breakfast cereals, breads, eggs, oils, butter and margarines have all risen sharply in price over the past year according to a July report from the Australian Bureau of Statistics ( ABS) (stock image)

Vegetables, fruit, breakfast cereals, breads, eggs, oils, butter and margarines have all risen sharply in price over the past year according to a July report from the Australian Bureau of Statistics ( ABS) (stock image)

Milk is the latest staple to rise during Australia’s cost of living crisis as households are forced to pay higher prices for groceries, petrol and electricity.

Vegetables, fruit, breakfast cereals, breads, eggs, oils, butter and margarines have all risen sharply in price over the past year according to a July report from the Australian Bureau of Statistics.

Vegetables rose 7.3% across Australia, but increases were even higher in some capital cities.

In Darwin, the cost of vegetables increased by 9%, while Sydney and Melbourne saw vegetable prices jump by 7.7%.

In the 12 months to June 2022, fruits and vegetables increased by 7.3%.

Non-alcoholic beverages like coffee, tea, juice and soft drinks rose even more – 7.9%.

Dairy farmers' lawyer Shaughn Morgan of eastAUSmilk said the industry was under a lot of pressure, where those workers had no choice.

Dairy farmers’ lawyer Shaughn Morgan of eastAUSmilk said the industry was under a lot of pressure, where those workers had no choice.

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