A temporary price increase of 6.5 cents a litre paid to Norco dairy suppliers will help offset a horror summer that has blown out feed budgets and pushed many producers to the brink of despair.
Norco negotiated the price increase directly with Coles over an eight week period, with the supermarket giant indicating it will directly absorb the cost of the price rise rather than risk its position in the market by removing the dollar-a-litre drawcard for its consumers.
The price increase will come into effect April 1 and will be re-negotiated in June for the new financial year.
In an open letter to "the public and our valued consumers", Norco deputy chairman Michael Jeffery said the 124 year old co-operative had recently been working on strategies to extract greater value for its members' milk from the whole market that it supplies.
"We are currently finalising the implementation of a milk price increase across more than 6000 customers of Norco's fresh milk business so that by April 1 the Grocery and Route Trade market will be funding an average of 6.5c/l increase.
"As a co-operative that supplies milk to many channels, we want to thank all our customers and consumers for recognising that there has been a serious deterioration in the viability of the dairy industry and for taking steps in the right direction to correct this by continuing to support the 100 per cent farmer-owned Norco brand."