Dairy Farmers Concerned as Opening Milk Prices Fall Short

Australian dairy farmers have expressed disappointment following the announcement of opening farm gate milk prices for the 2026-27 financial year, with offers falling short of targets outlined earlier in the year.

Under the Dairy Code of Conduct, processors were required to announce their opening milk prices for the year ahead by 2pm Monday afternoon, with the given offers ranging from around $8.20 to $8.80 per kilogram of milk solids.

The prices fell well short of the $9.50 figure many producers had been looking to - a benchmark industry leaders had identified earlier this year as necessary to help offset rising production costs.

Australian Dairy Farmers president Ben Bennett described the opening prices as a "conservative floor", given the conditions facing the industry.

"It gives farmers something to work with as we head into what is traditionally a very busy time, negotiating and looking for competitive uplift prior to the end of the month," Mr Bennett said.

He said the sector continued to face significant pressure from high fuel, fertiliser and freight costs, as well as uncertainty in global commodity markets and currency fluctuations.

"There's no fat in the system at the moment," he said.

The ADF warns that seasonal conditions are also adding to industry uncertainty, with forecasts suggesting a strong El Niño could develop later this year - an outlook Mr Bennett said was causing concern across dairy regions.

"There's a lot of uncertainty and not a lot of comfort in the outlook right now," he said.

In Victoria, Victorian Farmers Federation United Dairyfarmers of Victoria president Bernie Free said the opening prices were disappointing and urged processors to revisit their offers.

"We're extremely disappointed with initial opening milk prices at a time when dairy farmers are facing skyrocketing on-farm costs," Mr Free said.

He warned the current figures could affect the viability of some businesses if they remain unchanged.

"We must see this price stepped up in the coming weeks to ensure the viability of dairy farmers and processors in these turbulent times," he said.

Mr Free also cautioned that lower returns could ultimately reduce milk supply, placing further pressure on processors as farmers reassess their future in the industry.

Negotiations are expected to continue throughout June as producers evaluate costs, production targets and investment decisions for the financial year ahead.