Milk Price Dominates Industry

AUSTRALIA - Milk price has dominated the start of the 2012/13 season with southern export region farmers facing a 8-10 per cent drop while northern domestic producers also face negative price signals, according to the latest dairy situation and outlook from Dairy Australia.
calendar icon 19 September 2012
clock icon 2 minute read

Milk price

Australian farm gate prices are still expected to finish the season around five per cent down on the previous season (to around $4.70-$5.00 per kg MS or 34-36 c/L), but an earlier supply correction suggests some upside potential.

Farmer confidence

In an update of the February-March National Dairy Farmer Survey conducted in late August, 53 per cent of farmers were positive about the dairy industry’s future. This represented a significant decline (13 per cent) in farmer confidence driven primarily by farmers in New South Wales, Queensland and Tasmania. Farm exits are now predicted to be more common, especially in Queensland. Murray Dairy and West Australia respondents are the only groups to have maintained the same level of confidence as six months ago.

Productivity to drop

Despite good seasonal conditions being experienced by the majority of farmers, the outlook for milk production is mixed, with an unanticipated 3.7 per cent drop in herd productivity reported by farmers in August. Actual milk production was also lower than initially predicted in all regions with Sub Tropical Dairy (northern New South Wales and southern Queensland) showing greatest drop in production.

DA’s milk production forecast for the current season remains for growth of around two per cent to 9.65 billion litres. While there’s some upside from improving commodity prices, downside risks from input costs remain. The year has commenced on a positive note, with production up 3.5 per cent for July.

Further Reading

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