Australian dairy farmers are raising the alarm after major milk processors announced opening prices for the 2025–26 season that they say don’t reflect the harsh realities on the ground.
Despite slight increases, farmers argue the new prices fall short of covering skyrocketing production costs driven by inflation, drought, and floods.
What’s the Problem?
Big processors like Saputo, Fonterra, and Bega have released opening prices ranging from $8.60 to $9.20 per kilogram of milk solids. That’s up slightly from last year, but many farmers were banking on at least $9.50/kg just to stay afloat.
And that expectation wasn’t wishful thinking. Input costs, like feed, fertiliser, and fuel, have all surged over the past year. For many producers, the math simply doesn’t add up.
“The climate challenges we are seeing right across Victoria, coupled with extraordinary cost increases on farm, mean that farmers are carrying unprecedented levels of financial and emotional strain,” said Mark Billing, president of Dairy Farmers Victoria.
Climate Crunch: Droughts and Floods
Australia’s weather has delivered a one-two punch to dairy regions. In Victoria, South Australia, and Tasmania, farmers are battling record drought conditions. Meanwhile, Queensland and New South Wales have been hit hard by flooding, wiping out pasture and damaging infrastructure.
The result? A steep drop in milk production and mounting pressure on already-stretched operations.
According to News.com.au, more than 40% of dairy farmers are now struggling with severe drought, and many are reconsidering their future in the industry.
“Some Might Walk Away”
The mental and financial toll has led to fears of an exodus from dairy farming altogether.
“If prices don’t reflect the reality on the ground, we’re going to lose more farmers. And once they leave, they don’t come back,” said Bernie Free, president of United Dairyfarmers of Victoria.
And when farmers walk away, the consequences aren’t just felt on farms; grocery shelves are affected too. With milk production falling, the cost of everyday items like milk, butter, cheese, and yoghurt is expected to climb in the months ahead.
What Farmers Want
Industry leaders are calling for urgent government support, including:
Disaster recovery grants
Transparent price-setting mechanisms
Infrastructure and drought resilience funding
Without that, they warn, Australia’s dairy sector could shrink further, with long-term consequences for food security and rural economies.
The message from farmers couldn’t be clearer: between sky-high costs and wild weather, current milk prices just don’t cut it. Unless something changes, we’re all going to feel the pinch – from the farm gate to the supermarket checkout.
