Milk shortage: Australians warned to prepare for dairy price hikes


Australians are warned that the price of milk and other dairy products is expected to skyrocket before Christmas due to reduced supply and increased demand.

Coles, Woolworths and Aldi have all raised milk prices by 10 cents per liter, and the shortage could impact cheese, cream and yogurt products in the coming months.

The dairy shortage comes amid Australia’s limited supply of urea – a critical ingredient in Australia’s diesel fuel supply that enables trucks to deliver everyday goods.

It was earlier revealed that SRH Milk Haulage, which transports milk from farms to factories in New South Wales, was running out of AdBlue diesel exhaust fluid, except for what was left at stations- service.

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Prices of milk and other dairy products set to rise in Australia

Sofia Omstedt, senior analyst for Dairy Australia, said demand for milk was increasing around the world, but production was not.

“We are seeing that this fairly tight supply and strong demand is putting upward pressure on prices, and at the same time, we have also seen increased cost pressures for dairy producers and farmers,” he said. she told news.com.au.

She said prices were likely to continue moving early next year, but that would not significantly affect buyers.

“The past year for many farmers had one of the most profitable years – Australian dairy farmers currently have fairly historically high milk prices, which means farmers are helping to absorb a part of the price increases, ”she said. .

Dairy products are also becoming more expensive to manufacture, with farmers having to pay higher prices for things like grains and fertilizers, Ms. Omstedt added.

She described the problem as a “perfect storm”, with cow populations in Australia declining due to drought and recent inclement weather that have wrecked yields.

With beef prices soaring, many farmers have chosen to sell their cattle rather than using it to make dairy products.

AdBlue, which is made from the urea fertilizer, is in short supply around the world after China banned exports this year in an attempt to contain food inflation.

Without this diesel exhaust fluid, designed to reduce nitric oxide pollution, half of the trucks on Australian roads will not start.

This crisis would threaten the supply of supermarkets and convenience stores with Dairy Farmers milk, Parmalat dairy products such as oak flavored milk, Saputo cheeses, including Cheer, and milk from Norco, A2 and Richmond Dairies.

Coles, Woolworths and Aldi have all raised milk prices by 10 cents per liter, and the shortage could impact cheese, cream and yogurt products in the coming months.

Coles, Woolworths and Aldi have all raised milk prices by 10 cents per liter, and the shortage could impact cheese, cream and yogurt products in the coming months.

“We don’t have anything in our depots in New South Wales – we efficiently send trucks to gas stations to get it,” Ben Nix, financial director of SRH Milk Haulage told Daily Mail Australia earlier.

“If gas stations start to run out, which I assume they will be in the not too distant future depending on who they source from, that just creates uncertainty in the market.

“Therefore, everyone increases their prices. You just don’t know what’s going on.

“In fact, there is only each man and his dog. ”

As a result, there has been a global rush for alternative supplies of diesel exhaust fluid from other urea producing countries such as Indonesia, Saudi Arabia and Qatar.

Trade Minister Dan Tehan on Monday called on transport companies to avoid hoarding AdBlue, but insisted there was no crisis as Australia could import alternative supplies.

He hinted Australia would buy supplies of AdBlue from Indonesia, nearly a week after South Korea signed an agreement with Indonesia to buy 120,000 tonnes per year for three years.

Trade Minister Dan Tehan on Monday called on transport companies to avoid hoarding AdBlue, but insisted there was no crisis as Australia could import alternative supplies.

Trade Minister Dan Tehan on Monday called on transport companies to avoid hoarding AdBlue, but insisted there was no crisis as Australia could import alternative supplies.

Australia is also approaching Saudi Arabia, the United Arab Emirates, Qatar and Japan to source urea.

Incitec Pivot, Australia’s sole manufacturer of AdBlue, supplies 10 percent of the domestic market.

But in November, he announced that from December 2022, it would stop manufacturing the product at its Gibson Island factory in Brisbane, with chief executive Jeanne Johns blaming the failure to strike a gas supply deal.

The company, listed on the Australian Securities Exchange, issued a statement Friday promising to increase production next year before the plant closes.

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