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Coffee lovers can expect a price rise as dairy farmers get more for their milk

Sue Stagg says her cafe will have to charge more for coffee. (ABC News: Maren Preuss)

For the many Australians who have a coffee to get the day going, another cost-of-living price rise is coming for you.

On the back of milk price rises, cafes near you may be looking to charge more for a cup of coffee.

Hobart cafe owner Sue Stagg says her customers will soon be paying extra — "50 or 80 cents per cup".

Mrs Stagg and her staff make about 8,000 coffees a week.

They use 1,300 litres of dairy milk a week — and the price of milk is going up.

"We support a local [milk] supplier and they are considering their price rises along with us," Mrs Stagg said.

"Everybody has to pass it along the line."

Sue Stagg says coffees will increase in price by 50 to 80 cents at her cafe. (ABC News: Maren Preuss)

What do coffee drinkers think?

David Gentle is a regular at Mrs Stagg's Hobart cafe.

"I guess it's inevitable; everything else is going up … but we don't want to pay too much either, because we want to enjoy our coffee.

"If it goes to the farmers, I'll pay it, yes, but not if it goes to the middle man," he said.

Coffee drinker David Gentle is happy to pay a bit extra for his coffee if farmers get more, but he doesn’t want prices to go up too much. (ABC News: Fiona Breen)

Bonnie Lowan said she was happy for cafes and farmers to get more.

Some coffee drinkers said they might cut back on the number of coffees they drink each day, but Sam Ling said he would continue to have two or three no matter the cost.

"I'm a coffee addict, it [the price rise] shouldn't have much impact at all," he said.

Self-confessed coffee addict Sam Ling says the price rise won't affect how many coffees he drinks each day. (ABC News: Maren Preuss)

'A long time coming'

While it might hurt the hip pockets of consumers, dairy farmers are relieved. They say milk is finally being valued.

"We're currently … getting around about 70 cents per litre on farm."

Dairy farmer Cheryl McCartie says she knows high prices won't last forever. (ABC News: Craig Heerey)

Input costs on the farm for things like fertiliser, fuel, freight and wages have gone up by about 30 per cent.

"We are good at keeping costs down … but, when they are beyond your control, having a good milk price means we can actually still make investment in our farm and our people, and to things that help the environment," Mrs McCartie said.

Mrs McCartie and her husband Theo have lived through some big lows in the dairy industry: in 2011 when supermarkets slashed milk prices by one-third with a $1-a-litre milk campaign, led by Coles, payments to the farmer were slashed.

Then in 2016, processor Murray Goulburn ran into financial problems and retrospectively cut milk prices, meaning farmers were paid less than the cost of production.

An increase in milk prices has been "a long time coming", dairy farmers say. (ABC News: Maren Preuss)

The McCarties thought about leaving the industry. Many farmers did leave and Australia's milk production plummeted by about a billion litres over five years.

In 2022, production is still dropping, prompting a frenzied bidding war between the processors.

Janine Waller from the Australian Dairy Processors Association says milk supply has been falling. (Supplied)

Janine Waller from the Australian Dairy Processors Association said that in the past year, milk supply had dropped 3.5 per cent, and was projected to drop another 1 per cent.

"We're all competing for milk, which is why we've seen the high prices that we've had with this opening milk price season," Ms Waller said.

Mrs McCartie said she was happy to have stuck with the industry.

"I'm also a realist and know that high prices are not going to always stay up there," she said.

"So we are really mindful of using this for mitigating risk."

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