Australian milk price rises due to Middle East war cost pressures
Consensus Summary
Australian dairy farmers and supermarkets are locked in a cost-of-living crisis triggered by the Middle East war, which has sent fuel and fertiliser prices soaring. Farmers, including those in Queensland and New South Wales, are pushing for a 20–30 cent per litre increase in milk prices to cover unsustainable input costs, with some already reducing production or selling cows. Coles led the way by raising home-brand milk prices by up to 20 cents per litre in late April 2026, while Woolworths and Lactalis committed to smaller, phased increases (10 cents and 5 cents per litre, respectively) for select suppliers. The cooperative Norco and advocacy groups like eastAUSmilk also plan price hikes, though details remain pending. Diesel costs have risen to $3.20 per litre, and urea fertiliser prices have tripled, with 60 percent of Australia’s supply disrupted. Supermarkets face pressure to pass costs to consumers, though they emphasize balancing farmer viability with shopper affordability. Australian milk production has fallen to 8 billion litres annually, raising concerns about potential shortages if farmers continue cutting output. Temporary payments from retailers like Coles and Lactalis provide short-term relief, but industry leaders warn long-term pricing certainty is critical to avoid further supply chain strain.
✓ Verified by 2+ sources
Key details reported by multiple sources:
- Coles increased home-brand milk prices by up to 20c per litre (e.g., 1L from $1.65 to $1.85, 2L from $3.20 to $3.55, 3L from $4.65 to $5.15), with similar rises expected from Woolworths.
- Dairy farmers are calling for a 20–30c per litre increase in milk prices to cover soaring fuel, fertiliser, and transport costs linked to the Middle East war.
- Woolworths is paying an extra 10c per litre to fewer than 20 direct suppliers for its Farmers’ Own brand milk, effective immediately.
- Lactalis, Australia’s largest dairy company, will pay an extra 5c per litre to over 800 farmer-suppliers from May 1, 2026.
- Norco, a dairy cooperative with 190 farms in NSW and Queensland, will increase prices for its farmers and retailers, with details to be announced after a board meeting in April 2026.
- The Middle East war has caused diesel prices to rise to $3.20 per litre (up 6c in one week) and urea fertiliser prices to triple, with 60% of Australia’s supply sourced from the region.
- Australian milk production has declined to about 8 billion litres per year, significantly lower than New Zealand’s 21 billion litres.
- Dairy farmers are reducing production, cutting staff, or selling cows due to unsustainable costs, risking milk shortages in the next 12 months.
- Coles temporarily paid an extra 5c per litre to dairy farmers and made one-off relief payments totaling $1 million.
- Australian Dairy Farmers (ADF) president Ben Bennett stated farmers need long-term pricing certainty and a fair return for milk, not just temporary payments.
Points of Difference
Details reported by only one source:
- Coles last increased milk prices by such large margins in July 2022, with further 5c increases over the subsequent three years.
- Norco’s full cream milk retails for up to $2.90 per litre in major supermarkets, with hikes leaving families paying an extra 30–50c per week.
- Michael Harvey (Rabobank) predicted higher price increases for branded milk and high-protein dairy beverages due to record whey protein prices.
- Coles spokesperson confirmed price increases cover rising costs for the business and farmers, acknowledging pressure on Australian households from petrol, energy, and mortgage costs.
- eastAUSmilk called for a 30c per litre increase in supermarket milk prices, with 15c for farmers and 15c for processors.
- A dairy farmer quoted in 7News said, 'Every farmer I talk to at the moment is making a loss.'
- Woolworths branded full cream milk is currently sold for $1.60 per litre, which the dairy industry previously called unsustainable.
- Woolworths declined to confirm the 10c per litre increase to news.com.au but stated it was 'working to find the right path through' with suppliers.
- Lucas Kennedy, a Queensland dairy farmer, welcomed Woolworths’ 10c per litre increase, stating it would help his business invest in operations.
- Ross and Sally Hopper (Maleny Dairies) do not plan to increase prices despite rising costs, focusing on maintaining fair supplier relationships.
- Michael Hampson (Norco) said resin for plastic milk bottles has surged from $1,200 to $3,500 per tonne, exacerbating packaging costs.
- South Australian Dairyfarmers’ Association president Rob Brokenshire warned of a 6% reduction in SA dairy production over the past year due to drought and now fuel/fertiliser crises.
- Janine Waller (ADPF) urged government support to secure milk supply, calling it a 'massive food security issue.'
Where the reporting differs
Details that conflict, or appear in only some outlets:
- The Guardian states Coles increased milk prices by up to 20c per litre effective April 2026, while News.com.au and ABC report Woolworths and Lactalis are only committing to smaller, phased increases (10c and 5c respectively) with no confirmed Coles price hike date.
- News.com.au claims Woolworths branded milk is currently $1.60 per litre, but the Guardian reports Coles’ home-brand milk was already at $1.65 per litre before its 20c increase.
- The Guardian says Woolworths ‘did not respond’ to questions about milk price plans, while News.com.au and ABC state Woolworths is ‘working to balance’ costs but has not confirmed a broad price hike.
- ABC reports Maleny Dairies will not increase prices, but does not clarify if this applies to supermarket-sold milk or only their direct-to-consumer products.
- News.com.au cites a farmer saying ‘every farmer is making a loss,’ while the Guardian and ABC suggest some farmers are receiving temporary relief payments, implying mixed financial outcomes.
Source Articles
Coles adds 20c to the price of milk as war in the Middle East pushes up Australian grocery costs
Farmers have been calling for higher prices for weeks, amid soaring diesel and fertiliser costs and limited supply Get our breaking news email , free app or daily news podcast Coles has increased home-brand milk prices by up to 20c a litre, with Woolworths set to follow as war in the Middle East starts to hit Australian grocery costs. The price rise will support the company’s bottom line against pressure from higher fuel and operating costs, while some of the revenue will be temporarily passed o
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