Milk price set to top $3 as farmers feel drought

Milk prices are set to soar by up to 25 per cent after Australia’s biggest processor warned it would be forced to pass on cost increases incurred by dairy farmers as a result of the drought.
  
National Foods, which owns the flagship Pura brand, said the price of milk at the farm gate had risen as farmers passed on the higher cost of grain fed to cows.
  
Grocers have tipped the price of a two-litre carton of milk could break through $3 barrier as the higher costs flowed through the system over the next six months.
  
National Foods managing director Ashley Waugh described the rise in raw milk prices as unprecedented after the drought stripped more than one billion litres from Australia’s annual milk supply. “This is having a significant effect on milk available to support export demand,” he said. “Furthermore, the milk being produced is costing farmers more because stockfeed prices have risen.”
  
Farm gate prices had increased about 10˘/litre to 40˘ to 45˘/litre, the company said yesterday.
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