Norco will increase the price of its milk by 5c a litre.
Norco will increase the price of its milk by 5c a litre. Marc Stapelberg

Norco announces 5c milk price increase

NORCO has announced it will increase the base price of milk by five cents a litre, saying its members can't wait for the government to decide whether to introduce a levy.

Chairman Greg McNamara said a proposed 10 cent levy, that would be applied to the retail shelf price of milk, was "founded with the best intentions and Norco has pledged its support for the initiative".

"However Norco's Board is of the view that its dairy farmer members are no longer in a position to be able to wait for this approach to take shape and is concerned about the longevity of a levy," he said.

"We are concerned that the proposed levy may be seen as a temporary measure rather than an embedded increase in the farm gate milk price to address the escalating costs of production and that once the drought breaks, the levy could simply fall away.

"Our overarching priority as Australia's largest 100 per cent farmer owned dairy co-operative is to protect the long term interests of our members and we must take immediate action now."

Mr McNamara said the increase in Norco's price was based on a review of the co-operative's year-to-date performance.

The price will be increased for September and October, and will inject about $1.8 million into members' businesses.

"We know it will be of direct benefit to help address some, but not all, of the rapidly increasing costs of production that our member farms have been confronted with," Mr McNamara said.

Norco's ability to keep paying the increased milk price will be reviewed at the end of October, however Mr McNamara said he was hopeful that this good news story will resonate with the loyal consumer following Norco already has and as a result of their ongoing support the increased price can continue.

"We have an incredibly loyal consumer base who love Norco milk and what the co-operative stands for," he said.

"They know that our dairy farmer members (as the owners of the co-operative) directly benefit from the support they give us in purchasing our quality dairy products we produce.

"To make this price increase permanent, we need to spread our reach up and down the East Coast, convert more dairy customers to Norco and increase sales of Norco branded milk to help drive a sustained future at the farm gate."