Supermarket milk prices have jumped by 25 cents

It follows recent increases in the processing chain such as sourcing, transportation and packaging costs, including a substantial rise in farmgate prices paid to dairy farmers.

A Woolworths spokesperson said the farmgate prices paid to dairy farmers had risen significantly this season, and as a result they were paying their own brand suppliers more for milk.

"Across the dairy cabinet, brands have already increased their retail prices to reflect higher wholesale costs across the entire industry," they said.

"We'll be adjusting the price of our own Woolworths brand milk in the coming days to reflect these higher costs as well.

"We remain focussed on delivering value for customers across their shop and have frozen the price of 200 essential household products until the end of the year to provide certainty for our customers."

Woolworths are increasing the price from $1.35/L to $1.60/L with a 25c increase on their milk products.

While Coles supermarkets and Coles Online nationally have jumped their branded fresh white milk by 25 cents per litre, while the UHT white milk has also jumped by the same amount.

Consumers will now pay $1.60/L of fresh white milk and UHT white milk at Coles.

In June, Coles signed updated contracts with 100 Australian dairy farms to supply milk directly for the Coles Brand.

In recognition of the higher costs being faced by dairyfarmers, this included an increase to the farmgate price paid by Coles this financial year even for farmers with multi-year contracts already in place.

In recent months Coles has also agreed significant increases to wholesale prices in markets where Coles Brand milk is sourced from processors, as the farmgate price they pay to dairy farmers has also risen substantially.

Australian Dairyfarmer's Association president Rick Galdigau said the dairy industry had been saying right through they needed a whole supply chain increase.

"That's been always been our stance and this obviously reflects that," he said.

"We said all along, dollar milk will have a disastrous effect on the farm gate and on the farmers themselves.

"We have lost lots of farmers, there's not the milk available, we have got processes with contracts to fill, who are now having to pay big money to be able to keep that milk coming in door."

Prior to Woolworths announcement Mr Gladigau said he wanted Woolworths and ALDI to also increase milk prices.

He said processors have had to pay more at the farm gate and that helps farmers so it's got to be a win for the dairy industry.

"We're talking over $10 a kilo in the SA central region, so you would have to feel that that increase has to be outweighing the input cost,' he said.

He said the increased opening milk price was good because it also meant farmers would keep investing in their farms.

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He said other milk alternatives would not be cheaper than the increased shelf milk price.

"Given the nutritional benefit of white milk that wouldn't be one that you would want to remove from your shopping basket," he said.

Northern NSW and southern Qld Coles Brand supplier, dairy co-operative Norco chief executive officer Michael Hampson said the increased farmgate price was making a huge difference to dairy farmers.

"Through our long-term partnership with Coles, we have been able to support our 300 farmer members with a record farm gate milk price increase across the total 200 million litres that our members supply to our 100 per cent farmer owned co-operative," he said.

"This is especially important as farmers face pressures from rising costs of production, with many still recovering from the devastating impacts of recent unprecedented weather events."

Dairy farmers John and Anne Boyd, whose farm at Pirron Yallock in Western Victoria has been supplying Coles directly since 2019 and has a contract in place to June 2025, said shoppers buying Coles Brand milk directly benefited family farms like theirs.

"We appreciate the stability a three-year direct supply agreement gives us, to enable constant investment to produce the best quality milk we can," Mr Boyd said.

"As we see it, it's a win-win for all.

"Coles support us and we support them, then by buying Coles Milk consumers can support the farmer to produce high quality milk they can enjoy.

"It is also Coles' responsiveness and dependability that has impressed us.

This year they significantly increased prices paid to respond to our current cost pressures when they didn't have to, as we already had an agreement in place."

He said it reaffirmed Coles was the right milk supply partner for them.

"They really value a sustainable partnership," he said.

Coles chief commercial officer Leah Weckert said they were aware customers were facing increased cost of living pressure and Coles remained committed to deliver great value to its customers.

"Raising prices is never something we do lightly, however the increased supply chain costs we are seeing, including higher payments to dairy farmers and processors, have necessitated these increases on Coles Brand milk products," she said.

"The feedback we've received from farmers and processors following the recent increases in farmgate and wholesale prices has been very positive, and we hope customers will help us continue to support them by purchasing their great quality Australian milk."