A major Australian supermarket chain has put in the place a AS$1 million (€610,000) support package to combat soaring input costs for its farmer suppliers.

Coles is one of Australia’s leading retailers, with 840 supermarkets spread across the country. The company recently announced a support package for its farmer suppliers who have been badly hit by a hike in input costs.

“We know rising cost pressures are affecting many Australian farmers and suppliers who are navigating higher input expenses such as fuel, fertiliser, and packaging,” the letter stated.

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“To help our dairy farmers manage rising costs, we are committing an additional temporary payment of approximately 5 cents per litre to direct-sourcing farmers, on top of our advertised, competitive farmgate price,” the letter added.

The AS$1 million support package for what are described as direct-sourcing farmers will be delivered by ways of a one-off payment to individual farmers.

“We’re proud to support Australian farmers by investing in the long-term sustainability of the industry,” Coles said.

Meanwhile, Australia’s last completely farmer-owned dairy cooperative, Norco, has announced a 5c/litre increase to its farmgate milk price from May 2026, which it said would deliver an additional $1 million per month to farmers.

The ongoing conflict in the Middle East, and the resultant closure of the Straits of Hormuz, has a provoked a serious price shock across Asia and Australia.

The cost of fertiliser and fuel have increased dramatically as a result of the conflict and the overall supply disruption.

The price of urea has more than doubled since the start of the war, increasing from €800/t (€480/t) to around AS1,800/t (€1,080/t).

Fuel costs have also risen sharply over the last two months, jumping from AS$1.70/l (€1.02/l) to AS$2.65/l (€1.59/l) – an increase of 53%.