Mr Forbes, who is a dairy farmer based at Gloucester on the Mid North Coast of New South Wales, said farmers had been facing higher input prices, including for items such as diesel and fertiliser.
“It means our profit margins have been reduced,” he said.
“I think we were probably in a stronger position even last year … we’re certainly chasing that inflation at the moment.”
He said floods and wet weather had also impacted farmers.
“I think milk on the north coast is back over 20 percent at the moment to what it was last year, and we had a flood year last year as well,” he said.
“Production throughout the whole country is being suppressed, I think we’ll see June figures probably in excess of 10 per cent, that the Australian production will be down across all states.
“So there’s a real shortage of milk there now and huge demand for that milk.”
Ben Geard, from Geard Family Farms in southern Tasmania is a Coles supplier, and said the jump in the price of Coles milk “was bound to happen”.
“Milk prices for farmers have seen quite a considerable increase this year so, it was probably only inevitable that Coles and other processors are going to try to recoup their costs,” he said.
“It’s not great for customers although milk has been undervalued for quite a while when you compare it to some of the other staples — water, soft drink, and that sort of thing.
“We were at a dollar a litre there for some time and that ended nearly two years ago.”
Mr Geard said “that was a good thing”.
“$1.60 I still think that’s still pretty reasonable for a litre of milk,” he said.
“It’s not good these prices just increasing for 12 months.”
Mr Geard said prices needed to remain competitive with other industries if dairy farmers were going to stay in the industry.
He said it cost a considerable amount to produce a litre of milk, with fertiliser increasing by 30–40 per cent.
“We’ve got to use a lot of fertiliser on the grass and this time of year we’re feeling a lot of grain in the dairy to make sure we’ve got milk through the winter,” he said.
“As good as the prices are this year there’s definitely a lot of payments going out as well.”