As the impacts of a global dairy crisis loom for Australia, staples such as milk, butter, cheese, and yogurt might be the next to skyrocket in price.
The Victorian Farmers Federation (VFF) said on Thursday that inflation, power prices, drought, floods, and fertiliser costs have all put a strain on supplies.
Farmers’ difficulties with land acquisition and irrigation access were also mentioned as challenges that hampered their efforts to deliver popular dairy products to consumers’ meals.
The floods in NSW and Queensland, according to a VFF official, haven’t helped the situation because they’ve ‘destroyed significant tracts of prime productive farmland.’
As a result, there is less product on supermarket shelves.
‘The fewer of a product we have, the more in demand it is, and prices climb as a result,’ the representative explained.
Weather-related issues have combined with an unprecedented increase in fertiliser costs for the industry, leaving farmers with no alternative but to pass those costs on to consumers.
‘Fertilizer is a significant input expense… and is required to generate the volume of food we produce,’ according to a VFF spokesman.
‘As prices rise, farmers will be forced to absorb higher costs, which will inevitably be passed on to consumers.’
According to the World Bank, global fertiliser costs have risen about 30% since the beginning of the year, following an 80% price increase last year.
Concerns over fertiliser affordability and availability have also been exacerbated by the conflict in Ukraine, according to the report.
Sanctions against Russia and Belarus, as well as export restrictions in China, had exacerbated supply difficulties.
Urea, the most prevalent fertiliser on the market, has risen above its 2008 highs, costing about $1,300 per ton, up from $200 in 2016.
Farmers have also suffered extra hardship as a result of limited irrigation access in southern regions of the country since December last year due to drought conditions.
On Tuesday, the Bureau of Meteorology said’serious rainfall shortages’ were still present in southeast South Australia, southern Victoria, and western Tasmania.
Dry weather can raise feed and water prices for dairy farmers, as well as reduce animal water supplies.
‘The best and most farming output comes from fertile, well-watered farming land.’ The VFF official explained that the less of this type of land available, the less produce the agriculture business produces.
The price spike warning for dairy foods comes after shops reported record price increases for groceries, particularly canned products, soft drinks, and coffee.
The expense of life in Australia is also rising, with weekly bill totals increasing.
Families in Australia spend $1,770 a week on necessities, with transportation expenses increasing by 12.9% in the last year, more than doubling the already high inflation rate.
Inflation rose by 5.1 percent in the year to March 2022, the fastest rate in 21 years, with the International Monetary Fund guessing on whether it will continue to rise.
‘Standard economic theory implies that inflation will become out of control under a protracted mix of specific monetary and fiscal policies, but whether inflation will persist toward that end deserves further examination,’ according to an IMF analysis from April.
The top four banks have indicated that they will pass on the entire interest rate hike announced on Tuesday to home loan clients, forcing mortgage payments to skyrocket.
The Reserve Bank announced that the cash rate would increase by 50 basis points, from 0.35 percent to 0.85 percent, the greatest monthly increase in 22 years.
As the east coast sweats through a frigid winter and worldwide gas prices skyrocket, the new Labor administration is pressing coal power facilities to increase output as quickly as possible to alleviate electricity cost concerns.
The Greens contend that this is the incorrect strategy, and instead advocate for a big and quick investment in renewable energy to achieve net zero carbon emissions by 2035.
Former deputy prime minister Barnaby Joyce, on the other hand, believes Australia’s measures will have no impact on global temperatures because both China and India are pursuing additional coal power.
‘Coal production in China has reached new highs in the last two quarters. China would cover for us in approximately a month if Australia vanished from the face of the world,’ he told Daily Mail Australia last week.