Father-of-three Ken Atkins bought a dairy farm in Tamworth 18 months ago and has faced some of the cruelest drought conditions yet.

The dairy staple will go up by 10 cents a litre, it’s a small price to pay to help save the dairy industry Mr Atkins said.

“We’ve cut production 10 or 15 per cent and we’ve cut our cow numbers back,” he said.

“The drought has had a huge impact for us as a young family because the price of milk hasn’t changed in eight years.

“A lot of people before this drought were working for nothing and I know a lot of people actually borrowing money to keep the business money, we’re essentially subsiding other people’s grocery bills at the moment.”

Forced to hand feed 250 head every day, the young family’s grain bill has risen to $150,000 a year.

That adds six cents per litre of milk to their running costs.

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Milk production in the state has plummeted by 11 per cent in the last year.

But, increasing the price of milk at the supermarket has little impact on the income passed on to farmers if processors don’t get on board.

Earlier this year an Australian Competition and Consumer Commission [ACCC] inquiry into dairy found big supermarket chains used their bargaining power with processors to deliver savings to consumers.

Dairy farmers were thrown into crisis in 2016 when changes to the farmgate prices paid by the two biggest dairy processors hit farmer incomes significantly.

The responsibility lies with processors to pay a higher wholesale price to the farmer.

Peel Valley Milk in Tamworth has sidestepped processors and bargains directly with Woolworths for a fair price.

While $1 per litre milk does not directly affect them, lifting the base price of milk has a positive impact for all producers in the industry, Peel Valley fifth generation dairy farmer Todd Wilson said.

“We do the whole lot, we milk cows, bottle our own and sell direct to Coles and Woolworths at an agreed price,” he said.

“The higher the base price in milk the higher the value of milk in general, that means I can sell my milk for more as well because of that.”

NSW Farmers’ Association calls on Coles and Aldi to follow suit and raise milk prices.

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