The clause, then and now
Under the Dairy Code, processors other than small businesses must publish their standard milk supply agreements by 1 June for the year starting 1 July. Norco offers two: an ongoing exclusive agreement, for farmers who sell all their milk to it, and a non-exclusive one. We read both forms for 2025-26 and 2026-27. The clearest change is in how the price can move once the year has started.
| Term | 2025-26 | 2026-27 |
|---|---|---|
| Minimum price | The rate of fifty cents per litre. |
The rate of fifty cents per litre. |
| Base price and the floor | The Base Price will not be less than the Minimum Price minus any Fees. |
No equivalent sentence. Clause 13 keeps the minimum price as the lowest price Norco will pay for milk that meets its specifications. |
| Changing the base price during the year | It may be increased during the financial year by notice to the Supplier(clause 13) |
Norco may issue a Pay Rate & Fee Notice to increase, decrease or otherwise change the Base Rate, Bonus Payments, Loyalty Payments and Fees(clause 34) |
| Changing bonuses during the year | Norco may increase Bonus Payments during a financial year by notice to the Supplier.(clause 30; loyalty payments the same, clause 22) | |
| Cutting the minimum price | Both years: only for an extraordinary event, with at least 30 days’ written notice to the supplier and the ACCC, after which the supplier may end the agreement within 21 days. | |
The non-exclusive form changed the same way: its 2026-27 clause 37 lets Norco issue a
notice to increase, decrease or otherwise change its agreed volume price, bonuses, loyalty
payments and fees, and the 2025-26 form spoke only of increases. The plain-English summary
at the front of the exclusive agreement changed too. Last year it said Norco can increase the Base Price for a year. You will be given notice of any increase.
This year it says Changes to the Base Price, Bonus Payments and Loyalty Payments are announced by Norco in its Pay Rate & Fee Notices.
What the Dairy Code protects
The Dairy Code is the federal regulation that governs contracts between dairy farmers and processors. It requires every agreement to state a minimum price (section 26). Its rules on price cuts, sections 27 and 28, are both written about that minimum price: no retrospective cut in any circumstances, and no cut in advance imposed by the processor alone except in limited exceptional circumstances. Norco’s contract tracks both.
So the question for a supplier is how much of their pay sits above the 50-cent floor. The contract does not say what a typical farm is paid, so we estimated it. For milk at 4.0 per cent fat and 3.3 per cent protein, our assumption and not a Norco figure, the July base price comes to about 67 cents a litre before any bonus: 23.5 cents a litre plus about 20 cents for the fat and 23 cents for the protein, at the schedule’s $4.90 and $6.86 a kilogram. On that estimate about 17 cents a litre of base pay, and every bonus, sits above the minimum price. That is the part clause 34 reaches.
We make no claim that the 2026-27 agreement breaches the Code. We have not asked a lawyer, Norco or the ACCC how the Code applies to pay above the minimum price.
What the pay schedule changed
| Item | 2025-26 | 2026-27 |
|---|---|---|
| Base price, cents a litre | Northern Region 23.5 (July to December) rising to 26.5 (February to May). Southern Region, south of the Telegraph Point bridge on the Pacific Highway, 2.0 to 3.0 lower each month | One rate for all regions, at last year’s Northern Region figures |
| Fat and protein, dollars a kilogram | $4.90 and $6.86 (July to December); $5.20 and $7.28 (January to June) | Unchanged |
| Regional payment, cents a litre | None | 4.0 for Tweed, Kyogle, Richmond Valley, Lismore, Byron and Ballina, and the Queensland regions; 3.5 Clarence Valley to Kempsey; 1.5 Comboyne; 1.0 Taree; 0.0 Hunter Valley |
| Milk solids bonus, cents a kilogram of fat plus protein | Paid from the first kilogram: 50.7 under 900 kg a month, up to 210.0 at 16,800 kg and over | Nothing under 3,001 kg a month; 75.0 from 3,001 kg, up to 156.5 at 13,501 kg and over |
| Quality bonus, best band | 2.5 cents a litre | 3.0 cents a litre |
| Organic milk bonus, cents a litre | 24.0 to 32.0, by month | 38.0 every month |
| Co-operative premium, January to June | 1.0 cent a litre | 1.0, plus 1.0 more for suppliers who complete Norco’s Farm Data Survey |
| Payment for signing the new form | None | 2.0 cents a litre |
For a Northern Rivers farm, the base price is the same as last year and the regional payment adds 4 cents a litre. The milk solids bonus pulls the other way. A farm sending 7,000 kilograms of fat and protein a month drops from 156.5 to 110.0 cents a kilogram; at 4,000 kilograms, from 146.5 to 75.0; at 2,500 kilograms, from 85.0 to nothing. Further south the trade runs the other way: farms below the Telegraph Point bridge gain 2.0 to 3.0 cents a litre on the base price and get little or no regional payment. Seasonal bonuses, loyalty payments and the new milk incentive are unchanged. Whether a given farm is better or worse off depends on its monthly milk solids, which the schedule cannot tell us, so we have not put a net figure on it.
Two cents to sign
The new “MSA Variation Payment” is 2.0 cents a litre, every month of the year,
for suppliers who sign an agreement to vary their existing contract and restate it in the form of the Milk Supply Agreement published on Norco’s website on 1 June 2026
.
A supplier who signed by 31 July 2026 is paid it on all milk from July to June. One who signs
later is paid from the month the signed form reaches Norco. That form includes clause 34.
Our view
Labelled as opinion. Norco is owned by its farmers, and a co-operative’s members are entitled to give it more room to set prices. But the trade on offer is lopsided in what it shows. The 2 cents a litre is certain and easy to count. The cost of the wider clause is neither: it depends on notices nobody has seen yet. The plain-English summary at the front of the contract should say plainly what clause 34 says: that pay above the minimum can now go down during the year. Last year’s summary was plain about increases. This year’s should be as plain about decreases.
Sources
The working. AI read the documents and drafted this story, under rules people set and answer for, working from the primary sources below. 9 quotations were compared by machine with our saved copies of the sources, and matched exactly. How we work.
- Norco Co-operative, On-going Exclusive Milk Supply Agreement, issued 1 June 2026 to take effect 1 July 2026 (PDF, read 13 October 2026): the summary, clauses 13 and 34 to 36, and Schedule 2 pay rates.
- Norco Co-operative, On-going Exclusive Milk Supply Agreement 2025-2026 (PDF, read 13 October 2026): the summary, clauses 13, 22 and 30, and Schedule 2 pay rates.
- Norco Co-operative, On-going Non-exclusive Milk Supply Agreement 2026-2027 and 2025-2026 (PDFs, read 13 October 2026): clause 37 and the price-change terms.
- Norco Co-operative, Milk Supply Agreements, 1 July 2026 to 30 June 2027 (web page, read 13 October 2026): the list of current agreements.
- Commonwealth of Australia, Competition and Consumer (Industry Codes, Dairy) Regulations 2019, the Dairy Code, compilation in force from 1 April 2025 (F2025C00376, read 13 October 2026): sections 8, 12 and 26 to 28.
How we did this
We read each agreement end to end and compared Schedule 2 table by table, not line by line, because several rows were renamed, added or removed between the years. We searched both 2026-27 forms for last year’s floor sentence and found it in neither. The 67 cents a litre is our estimate, not a Norco figure: we assumed milk of 4.0 per cent fat and 3.3 per cent protein by weight and 1.03 kilograms a litre, which gives 41.2 grams of fat and 34.0 grams of protein a litre, worth 20.2 and 23.3 cents at the July rates, added to the 23.5-cent volume rate. A farm with different milk will differ. The milk solids comparisons use the rate for the monthly band each example falls in, in each year’s schedule.
What we have not done. We have not asked Norco why it made these changes, how many suppliers have signed the new form, or whether it has issued any Pay Rate & Fee Notice since 1 June; its website shows none. We have not compared Norco’s prices with other processors’, and we have not named any farmer.
Supply Norco and see something we have wrong, or a notice we have not? Tell us and we will check it against the documents and log the outcome here.