Rising inflation sends milk prices up but farmers needed the lift

Supermarket giant Coles is raising its homebrand fresh and longlife milk by 25 cents.

Its one litre and two litre bottles will rise from $1.35 to $1.60 and $2.60 to $3.10, while the three litre milk price rises by 60 cents to $4.50.

Coles cited rising inflation costs of sourcing, transporting and packaging its milk.

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The price lifts follow farmgate rises for farmers, and requests from mainland dairy sectors to lift homebrand milk prices.

TFGA dairy council chair Geoff Cox, of Ringarooma, said price rises were a result of low milk stocks, high input costs and an average season.

"If milk prices didn't go up we would be much worse off this year because farm costs have gone up so much."

Mr Cox said milk production was down about seven per cent.

"In Tasmania that has been mainly climate related. We have had a dry season in the North West, where most of the milk is produced," he said.

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"Input costs have gone up significantly, including fertiliser and fuel prices, and that is also impacting on production."

He said rising costs, both nationally and internationally, meant dairy farming became less profitable, leading to lower production levels.

Mr Cox said he expected milk prices would remain buoyant for some time.

Rising milk prices are not unexpected, with milk, chese and other dairy related products seeing a year on year price increase of 4.1 per cent, and had an almost 2 per cent increase over the March quarter, according to ABS.

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