Drought and higher feed, water and electricity costs have created a shortfall in milk supply, a large supplier has confirmed.
Supply issues were noticed at an IGA store in Sydney’s inner west, with a sign posted to the fridge informing customers at the Summer Hill store some milk brands were in short supply.
“We apologise for non-supply of some of our milk lines by our supplier,” the note said. “This is due to the current conditions impacting dairy farmers.”
That supplier is Lion Dairy and Drinks, which is part of Lion – one of the largest food and beverage companies in the Oceania region.
Lion Dairy and Drinks buys about 1 billion litres of milk from more than 550 Australian farms every year, according to the company’s website. Its dairy brands include Dairy Farmers, Pura, Masters and The Complete Dairy.
A spokeswoman for the company said an increase in demand and adverse conditions had affected supply.
“Extreme weather conditions, including drought, together with significant cost increases across water, feed and energy, have contributed to the challenges facing dairy production in Australia which has resulted in lower milk supply and increased milk price,” she said in a statement.
“At this time, we are also experiencing an increase in demand for our dairy products and we are unable to source the additional milk to fulfil this volume.”
The Lion Dairy and Drinks spokeswoman said the company was experiencing “some intermittent supply shortfalls across our customer base”.
“We apologise for any inconvenience this is causing our customers or consumers. Please be assured that we are doing all we can to source additional milk and continuing to communicate and work with our customers to mitigate against shortages and ensure that our great tasting dairy products are available on shelf,” the spokeswoman said.
The shortage is expected to ease by next week, and has not been felt at all supermarkets.
The serious thing is that there’s a shortage of milk…What we need is a major retail price rise in the dairy cabinet.
Rob Miller, NSW dairy farmer
A Coles spokeswoman said it had not been affected by any milk shortage. A Woolworths spokesman said it had not experienced any brand shortages and was “in full supply”.
NSW dairy farmer Rob Miller, a member of the NSW Farmers dairy committee, said he had heard that in parts of regional NSW a shortage of products had emerged over the past month, with shelves being “quite empty of dairy – there might be a bit in the mornings but as the day goes on the product runs out. They’re not being re-stocked”.
The product shortage was the first he was aware of during the drought.
“It’s mainly the sour creams, creams, yoghurts, products like that,” Mr Miller said.
He said dairy production had plummeted in NSW and northern Victoria over the past year, due to drought. “And milk prices haven’t been lifted by the processor or the retailer to compensate for the high cost of production on farm, so farmers have just cut production.”
“The next month is going to get a lot worse,” Mr Miller said, referring to falling milk production on dairy farms at this time of year. “The serious thing is that there’s a shortage of milk … What we need is a major retail price rise in the dairy cabinet,” he said.
With Matt Bungard