Wednesday 21 September 2022 04:38 AM Milk price hike: Aussies set to pay 30 per cent more for their milk due to ... trends now
Milk prices could soar far beyond the rate of inflation due to crippling staff shortages, with some farmers forced to stop producing altogether.
Flooding and prolonged wet weather in farmlands across New South Wales and Queensland have also caused widespread damage to machinery and fencing, as well as prompting disease to spread in paddocks.
The end result is milk production being halved in some areas, meaning the wholesale price of the increasingly scarce product has soared.
Tasmanian and Victorian farmers have suffered a similar fate, with ongoing labour shortages also contributing to a widespread decline in production, on top of the high costs of electricity, diesel fuel and fertiliser.
Aussies are being warned to expect a milk price hike as inflation and labour shortages hits the industry hard with many dairy farmers being left with no other option but to walk away (pictured, a Gold Coast Coles)
Michael Harvey, Rabobank's Senior Analyst of Dairy and Consumer Foods, said there have been some significant challenges over the past decade through draught and market cycles - leaving many farmers deciding 'enough is enough' and shutting down.
This has had a 'huge impact on milk pricing and profitability', he explained to 2GB's Ben Fordham.
'Then you fast-forward to where we are now, clearly there are some challenges,' he said.
Ongoing labour shortages has caused widespread decline in production, while there is also the high costs of electricity, diesel fuel and fertiliser (pictured, a dairy farmer in Rochester, Victoria)
'What we've got at the moment is very high milk pricing for farmers, so the price they are getting for their commodity is at record levels and that is a good thing for them because it is coming in that high cost of production environment.
'We are seeing that industry that is going through a significant period of transition... we are seeing farmers leave the industry for other enterprise because of the labour shortages.'
One listener, who is a dairy farmer, informed Fordham that everyone can soon expect to see milk prices increase by 30 per cent.
