News

Tough times impact national production

By Dairy News

NATIONAL MILK production is continuing to fall, as tough conditions take their toll.

Northern Victoria has taken the biggest hit, with a 20 per cent drop recorded in November compared to the same time in 2017.

Dairy Australia figures show a trend of shrinking production in the region, which has seen a reduction of more than 113 million litres.

Dairy Australia analyst John Droppert said the results would not have been surprising to anyone working in the industry.

“It’s been a very dry spring and although the milk price is quite high, historically, that’s had to contend with high hay prices and dry weather, and high water prices,” Mr Droppert said.

“There’s a huge amount of cost being added and that’s led to many dairy farmers reducing their stocking and feeding rates and a number ultimately exiting the industry.”

Although Mr Droppert said the figures had been slightly inflated due to the strong year experienced last year, he ultimately expects the trend to continue.

“This is the time people start making those tough decisions and we wait and see whether there’s going to be an autumn break and people have had to make tough decisions.”

The national decrease for the year to the end of November was about 4.8 per cent.

Girgarre dairy farmer Tim Leahy said he had seen the impacts of dry conditions and high inputs as his cows make it through the dairy.

“Farmers will do their sums over the next few weeks and months and probably have to make some decisions,” Mr Leahy said.

“Farmers will sell their cows before they let them starve.”

Tatura farmer Michael Tuhan pointed to the number of herd auctions in recent months as evidence of the milk production loss.

He is looking to increase his production but said he had the benefit of a secured high-reliability water allocation.

While prices have picked up this season, input costs have risen as well. Mr Tuhan is disappointed that the apparent shortage of milk hasn’t translated into higher prices yet.

However, he is aware that processors dealing with lower milk volumes will have poorer efficiencies in their plants.