Norco to raise milk prices in bid to help dairy farmers
Posted On April 26, 2022
Norco Co-operative has announced it will increase the farmgate price of milk by five cents to help offset “exceptionally difficult” conditions for dairy farmers.
The average price per litre paid to farmers will rise to 84 cents, adding an extra $1.6 million to Norco’s 281 active members.
It’s not yet clear whether the price increase will be passed onto consumers by retailers.
The five cent increase will apply for May and June 2022, after which the co-operative is exploring additional milk price increases for the 2022/23 financial year which will be announced on or before June 1, 2022.
Norco Chief Executive Michael Hampson said farmers have been doing it tough in the face of huge natural disasters and the rapidly increasing cost of production.
“We are constantly looking at ways to increase the milk price for our members and industry at large and given the devastating impact of recent weather events on the Norco supply base, there has never been a more important time to deliver this support to farmers,” he said.
“Following the floods, many of our farmer members have repair costs in the tens of millions. This follows periods of rising operating costs and decreased production due to the significant and prolonged weather conditions which has placed added cash flow pressures on our members.
“As a business, we know firsthand the challenges faced following natural disasters, so remain wholly committed to doing everything we can to support our farmers during this period and beyond.”
Mr Hampson said if dairy farmers can’t make a profit on milk then it means that milk is being sold for less than it is worth.
“We need to invest in building a sustainable future for our dairy farmers and to do that, our farmers need to make a profit. If they can’t, it reflects an undervaluation of their product which then points to the supply chain needing to change this value equation,” he said.
“Norco certainly understands this and is working hard to deliver improved value, not only for our members but the wider industry.”
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Norco is unique in that it is a co-operative owned by member suppliers who operate Australian dairy farms.
It is Australia’s largest and oldest dairy co-operative, having been in business since 1895. There are currently 281 active members across 190 dairy farms in northern New South Wales and southeast Queensland, the areas hit hardest by recent floods.
The co-operative produces around 219 million litres of milk a year.