Woolworths Phases Out Farmers’ Own Milk by Mid-2027, Threatening Dairy Farmers

Woolworths is phasing out its Farmers’ Own milk brand by mid-2027, ending a direct-supply model launched in 2013 that connected regional dairy collectives to the supermarket without corporate processors. The withdrawal, already underway in South Australia, will reach New South Wales, Queensland, Victoria, and Western Australia by mid-2027. Farmers fear a return to traditional processor supply books will slash farmgate returns.

How the Farmers’ Own model worked

Woolworths launched Farmers’ Own in 2013 in the Manning Valley of New South Wales as a structural reform. The scheme let regional dairy farming groups negotiate farmgate prices directly with the supermarket, bypassing conventional corporate processors. Pricing was transparent and premium compared to standard retail milk. The brand was marketed as a way to give farmers a better deal and direct access to a major retailer.

Why Woolworths is ending the program

Woolworths cited evolving retail logistics, processing overheads, and shifting supply-chain economics as reasons for the phase-out. Tim Bale, a dairy farmer and co-creator of Farmers’ Own, suggested the brand was not profitable for Woolworths. He noted that oversupply not sold through Farmers’ Own was being sold at a loss, making the model unviable as sales declined due to lack of marketing. Woolworths has not publicly disclosed profitability details.

What happens to farmers now

Woolworths is offering contract extensions of up to 12 months and connecting suppliers with regional milk processors. However, farm advocates warn that returning to traditional processor supply books could reduce farmgate payments for businesses that structured operations around longer-term premium pricing. Some South Australian suppliers have already redirected raw milk into cheese and dairy manufacturing.

Processing capacity crisis in eastern Australia

The phase-out coincides with tight processing capacity across key milk sheds. In Queensland, the recent sale of major urban processing facilities for industrial redevelopment, combined with closed supplier books at regional co-operatives and multinational processors, leaves uncontracted milk volume with limited domestic outlets. Farmer Jason Rozynski warned he may have to cull his 600-cow herd if a processor does not purchase his milk. Queensland already imports half its milk supply.

Final Thoughts

Woolworths’ exit from direct dairy supply removes a premium pricing channel for 13 years of Australian farmers. With processing capacity constrained and few alternative outlets, farmgate returns face downward pressure. Meyka rates WOW.AX a B with a 12-month forecast of A$35.22, suggesting limited upside from this operational shift.

FAQs

Disclaimer:

The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.