Meanwhile, Coles’ ceased the 10c milk levy on December 31, leaving Norco farmers struggling, with a Coles spokesman saying the supermarket was looking for a long term solution that would not disadvantage customers.
“Coles is committed to finding a better model that can be adopted by the industry to assist Australian farmers, and intends to liaise with relevant parties including government and the ACCC,” he said.
“In the meantime, Coles will continue to look at ways to support Australian farmers, including by collecting customer donations at our supermarket registers nationally from February 25 until further notice. Coles will match these donations dollar for dollar.”
Queensland Dairyfarmers’ Organisation vice president Matthew Trace said the Coles dairy drought levy campaign was nothing more than a stunt.
“Because of Coles’ disregard and disrespect for its contracted supplier, from mid-January, Norco was unable to match the farmgate price being paid by its two major competitors.
“This led to some serious concerns that Australia’s remaining dairy co-operative may not be able to meet supply contracts if its farmers were forced to go to another processor able to pay a higher farmgate price.
“The good news released late last Friday was that by creating some operational efficiencies, Norco has been able to increase its farmgate price to its farmers by 6.5c/L and are now on par with that being paid by Parmalat and Lion.”
Woolworths said their price increase would see the supermarket sell two and three litre varieties of Woolworths branded fresh milk for $2.20 and $3.30 respectively, with every cent of the increase ending up with Australian dairy farmers.
A spokeswoman for Woolworths said fifth generation dairy farmer Paul Roderick from Harrisville was one of 160 Parmalat dairy farmers in Queensland supplying Woolworths branded milk, supplying 2.6 million litres each year to the supermarket through Parmalat.
Mr Roderick said he commended Woolworths for extending the campaign past its use-by date.
“For us, when they put the 10c a litre on the 3 litre homebrand milk prior to Christmas it brought our price up about 3.3 cents a litre, taking us above 60c a litre and increasing our price by about five per cent,” he said.
“The system worked very well and the money flowed through as it was supposed to but it was always meant to be a short term measure.
“I’m told about half our milk ends up in Woolworths bottles so for Woolworths to go out on their own and permanently put the price on the two litre milk as well adds another five to six cents a litre, which is closer to a 10 per cent increase for us.
“For our farm, that goes most of the way towards covering the extra costs of grain and feed prices.”
Mr Roderick said the past two seasons had seen farmers also battling with dry weather conditions and having to pay more for irrigation and power bills during the drought.
“But many farmers are at a crossroads and forced to make decisions whether to go on… we have reached critical stage, especially here in Queensland, where we can’t afford to lose any more.
“Drastic changes are needed, we need to have a conversation about the value of all fresh foods in supermarkets, including milk, so that the prices reflect the real costs of growing them and not used as a marketing ploy.
“We do need bigger changes but Woolworths has made a start and I commend them for that.”
Mr Roderick said before the introduction of $1/L milk people were happy to pay $1.30 for a litre of generic milk.
“So the excuse that consumers need cheap milk is not sustainable. Everyone loves a bargain but unfortunately bargains come at a cost to someone and in the case of milk, it is the dairy farmer who pays that cost.”
