30 cents more on weekly shop to deliver $1m more for local farmers

Households will pay about 30 cents more a week for milk after Norco moved to increase what it pays local dairy farmers, delivering an estimated $1 million a month back into local communities.

The cooperative has lifted its farmgate milk price by five cents per litre from May, a decision aimed at supporting farmers across Northern New South Wales and south-east Queensland facing rising production costs. 

That increase at the farm level is expected to flow through to supermarket shelves, with Norco estimating the impact on households will be modest — around 30 cents per week — while significantly improving returns for farmers.

Fourth-generation Norco dairy farmer Andrew Wilson said the rising costs of keeping farms running were relentless, with little room to absorb further increases.

“Whether it’s fuel for machinery, fertiliser for the paddocks or just keeping things running, the costs keep rising and it’s something you can’t step away from,” he said. 

Mr Wilson said fuel prices in particular had become a major burden, affecting everything from transporting feed to running essential equipment.

“It all adds up very quickly. Every part of the farm relies on fuel in some way, and when those costs spike, it flows through the whole operation,” he said.

He said without stronger returns for milk, many farms would struggle to remain viable.

“If these pressures continue, there’s a real risk that not all farms will be able to keep going. We need to be able to cover our costs and have something left to reinvest in the farm,” he said. 

While the increase for milk is relatively small for most households, it comes against a broader backdrop of rising grocery costs, with industry warnings that the total weekly shop could increase by as much as 20 per cent as higher fuel and fertiliser costs flow through the system.

Ben Bennett, President of Australian Dairy Farmers, said the sector had been under pressure for years, with production steadily declining and margins tightening.

“It’s ideal if we can grow as much pasture as we can, it’s the cheapest form to feed our cows, so these doubling in costs are significant because we’ve really got no way to mitigate that, we’re the price takers,” he said.

Mr Bennett said rising diesel and fertiliser costs, particularly for inputs like urea, were leaving farmers with limited options, and warned the situation could worsen if supply disruptions continue.

“If they don’t get nitrogen to put on their paddocks to grow the grass for cows to feed, they’re going to lose stock,” he said.

He said ongoing pressures could force farmers to reduce herd sizes, leading to lower production and higher prices for consumers.

“We’re better off to put a bit of money back toward the farmer now to ensure we don’t have an alternative situation, which will be, I think, a far bigger impact on the consumer.”

The change will push the average annual farmgate price to 97 cents per litre, with all additional revenue returning directly to farmers under Norco’s cooperative model. 

Founded in Byron Bay in 1895, Norco remains one of the region’s most significant agricultural organisations, with 281 active farmer members producing more than 200 million litres of milk each year. Unlike corporate dairy processors, Norco is owned by its farmers, meaning price increases are directed back into local businesses and communities rather than external shareholders.

Norco Chief Executive Michael Hampson said the relatively small increase for consumers would make a meaningful difference on the ground.

“To put it into perspective, the increase will likely amount to no more than 30 cents per week for the average household, but that 30 cents will significantly ease the pressure on our farmers and help secure their livelihoods,” he said. 

“These pressures are simply unsustainable without meaningful support across the supply chain, and this price increase is a small but important step in helping to offset those pressures.”