Low prices, recovery costs will send dairy farmers to the wall

Despite international dairy markets rising over the past 12 months, the newly announced prices are up by as little as five per cent in some instances.

Mr Bennett said the increase in prices has not kept pace with inflation, let alone allowing for the costs of responding to droughts and floods, including increased feed costs.

“Some dairy farmers just won’t be able to endure this latest blow and they’ll have to exit the industry,” he said.

“It’s a dire situation that I fear will lead to structural change in our industry.”

Mr Bennett said one challenge was that dairy prices were constrained on supermarket shelves.

“When a cyclone wipes out Queensland’s banana growers, the price of bananas rises rapidly in supermarkets.

“Yet we have almost half of Australia’s dairy farmers impacted by either a significant drought or a one-in-500 year flood and the shelf price of fresh milk hasn’t budged.”

He said many dairy farmers had recorded financial losses of more than $1000 per head in the current milk supply season — a figure which is expected to be dwarfed in 2025-26.

“Farmers will try and bridge this gap by selling stock to reduce the feed burden and fund the feed and water for their remaining cattle.

“This next season is going to be much worse again in terms of farmers’ financial losses.”

Mr Bennett said there had been a loss of liquidity in the cash flows not only of dairy farmers, but also of service providers.

“Dairy farmers are reliant on a phenomenal service industry employing thousands of people, and the lack of assistance leaves them vulnerable too.

“Support measures such as the Regional Investment Corporation (RIC) with its onerous application criteria fail to deliver what’s needed for farmers in a crisis situation, leading to a ripple effect which will be felt throughout the industry.”

ADF last week issued a plea to governments to support food security by urgently helping dairy farmers.

“We need immediate crisis support, including feed and water transport subsidies, cash grants and low interest loans and the activation of what’s known as ‘Category C and D’ disaster support measures in conjunction with the Commonwealth.

“Tackling the ‘cash crunch’ for farmers and communities will not only keep our farmers producing milk, but also benefit the regional communities where they shop.

“Fodder and hay reserves have run out and dairy farmers are looking at trucking hay from as far as Western Australia and Queensland.

“The NSW Government’s positive response to the floods, combined with flood recovery demand for hay in NSW, will mean there’s even less fodder and hay available to supply drought affected farmers in other states.”

However, Mr Bennett said there is a simple but pivotal role government can play in underwriting or subsidising stock feed imports from overseas, in order to give the commercial market the confidence to import more stock feed and increase supply to get farmers through the winter months.

“ADF is working closely with industry stakeholders — including stock-feed importers, transporters, and the Department of Agriculture, Fisheries and Forestry — to increase the availability of imported stockfeed.

“One viable option we’re exploring is palm kernel expeller (PKE), a high-protein, high-fibre feed source used extensively in the New Zealand dairy industry.”

What governments can do to help

The ADF says there are five things governments can do to help dairy farmers.

Immediate crisis relief:

Targeted industry support:

Long-term resilience building: