Milk producers have asked Australian supermarkets to lift the price of homebrand milk to help dairy companies struggling with double fuel and fertiliser hikes.
The dairy sector is urging Coles and Woolworths to increase the shelf cost of generic milk by at least 30 cents per litre as the dual shortage tightens its grip on farmers.
eastAUSmilk president Tim Bale said he was waiting for a response after approaching the grocery giants about the price change, which would allow Australian milk producers to do the same and remain competitive.
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"We need the generic milk to rise so other brands can rise, ensuring some goes to the farmers," Bale told nine.com.au.
"Farmers need [a lift] of 10 to 15 per cent."
A two-litre bottle of Woolworths full cream milk currently costs $3.20.
The Coles-branded full cream milk is the same price, equating to $1.60 per litre.
Nine.com.au has contacted Coles and Woolworths for comment.
Milk processers have called for the same change to cushion the blow of high diesel prices and fertiliser shortages.
The Middle East, known for being one of the world's most dominant suppliers of oil, also supplies up to 45 per cent of the world's urea.
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Urea is the most commonly used nitrogen fertiliser that promotes high crop yields and is used for wheat and vegetables.
"The cost of urea has gone from $800 to $1800 in the past month. Price increases of this level have never happened before," Bale said.
"Fuel and fertiliser are two major input costs for dairy farmers and cost increases of this magnitude cannot be absorbed by dairy farmers.
"Farmers will cut back production or exit the industry over the coming months if something isn't done immediately."
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Australian milk suppliers are also facing an increase in the cost of milk bottles and lids due to a domestic resin shortage.
Nick's Food, Milk and More general manager Nick Viropoulos received a letter from his milk supplier on Wednesday, advising him the cost of bottles and lids is set to double.
"This would probably translate to, in the early stages, somewhere between eight and 10 cents a litre," Viropoulos told 2GB's Ben Fordham yesterday.
"Equivalent to 20 cents a bottle will be the initial impact, so heaven knows where it's going to end up."
He said it was an Australian shortage, rather than a global shortage, as Australia relies on China for its resin production.
"Our only source of resin for blowing milk bottles and associated plastic bottles for drinks and beverages comes from China," he said.
"Now that there's a shortage of petroleum going all over the world, they're keeping the resin for their domestic market and they can't send any to Australia.
"Unfortunately the producers in Australia are forced to air freight it out of the USA at US dollar rates."
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