Bega announces increase to milk price, farmers fear rising electricity prices

The price is almost double that of the $4.60 on offer to farmers in the dairy crisis in 2016.

Bega executive chairman Barry Irvin said the company had carefully reviewed the market and strong competition for milk supply.

"Whilst market fundamentals remain stable for our product returns, the competitive market for milk supply is very strong with many companies adjusting their milk prices over recent weeks impacting our competitive position," Mr Irvin said.

"It is very important to us to reflect not only the market for our products but also ensure our suppliers in southern Victoria and south-east South Australia have a competitive milk price offering.

"With our competitive position in mind, we have made the decision to increase our milk prices for our southern Victorian and south-east South Australia suppliers for the 2022/2023 financial year."

The announcement comes after Fonterra announced a rise in its farmgate milk price to $8.80/kgMS and Saputo announced it had bumped up its non-exclusive minimum price to $8.80 per kg of milk solids.

Bulla announced the majority of its suppliers would receive between $9.30 and $9.50 per kilogram of milk solids, while the Union Dairy Company is offering $8.90/kgMS.

Farmer Power chief executive officer Garry Kerr said despite the rising milk prices, dairy farmers were struggling.

He said rising electricity prices were the latest blow to farmers.

"We still believe the whole industry is in crisis because of the whole input structure," Mr Kerr said.

"All the input costs are going through the roof."

Mr Kerr said he was concerned that a large number of people were deciding to sell their dairy farms.

"People are exiting the industry - if the industry was doing really well they wouldn't be exiting," he said.

"They're getting paid good money for their milk but their input costs have doubled or tripled in some cases."

Mr Kerr said he was keen to meet with government ministers to discuss a subsidy for farmers.

He said it was necessary to secure the future of the industry.

"The power costs are killing us," he said.

In addition to that there is angst about possible power outages. "If there are power outages our farmers can't milk their cows and obviously they have to milk their cows every day.

"We're not against changing to green power.

"We just want some sort of supply guaranteed."

Member for Polwarth Richard Riordan said he was speaking to dairy farmers on a regular basis.

"Dairying is energy time crucial," he said.

Mr Riordan said it was unfair to expect farmers to have a back-up power source.

"What is the point of a renewable future if everyone has to rely on diesel generators," he said.

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