Gippsland milk down by 7%
Dairy Australia is expecting milk production levels to be down by six to eight per cent for the current season.
At a recent DA board meeting, part of the monthly discussion was the milk production forecast for this year.
With the industry facing an extraordinary period of low farmgate prices, tight margins and wet conditions, DA managing director Ian Halliday said forecasting full year production levels was a moving target.
“Given the unfolding situation, we are currently projecting national milk production to be down six to eight per cent for 2016/17,” Mr Halliday said.
Dairy Australia figures showed national milk production for the first quarter dropped almost 10 per cent or about 240 million litres.
Total intake across the country is sitting at about 2.2 billion litres for the year to date.
From a state perspective, South Australia has recorded the biggest dip relative to last year, down 15 per cent (almost 20 million litres) for the first quarter and down almost 14 per cent for September alone. However, volume wise, Victoria’s intake is down the most by 187 million litres (or about 11 per cent) to about 1.4 billion litres so far this season.
In September alone, Victoria’s production dropped about 12 per cent. Across other states, Tasmania is down about seven per cent and NSW production has dropped about six per cent compared to the first quarter of 2015/16.
Within Victoria, the northern region has recorded the biggest fall for the year to date, down about 17 per cent or 87 million litres to 418 million litres, compared to the same period last year.
West Victoria has dropped almost 10 per cent and Gippsland is down seven per cent for the July to September period this year.
Queensland and WA have recorded modest growth so far this season, with steadier farmgate prices and fairly good seasonal conditions.
The Australian Competition and Consumer Commission last week announced its dairy industry inquiry would examine competition between milk processors, contracts between processors and farmers, global supply markets, and the profitability of dairy farms.
The ACCC outlined the key issues it will look at as part of its 12-month inquiry called for by the federal government.
Key issues to be considered include: competition between milk processors; contracting practices; availability of price and other market information; effect of private label products, including pricing, on the industry; options for supply into global markets; and, key factors influencing the profitability of dairy farms.
The United Dairyfarmers of Victoria praised the ACCC for taking a firm approach in its inquiry into the dairy industry.
“The ACCC has been given unprecedented powers in its inquiry including the ability to require companies into handing over information,” UDV president Adam Jenkins said.
“The inquiry is an important step on the path to reforming the dairy industry. Understanding the influences that contributed to this year’s industry chaos is important in ensuring we don’t ever repeat the milk crisis.”
Mr Jenkins said the UDV would contribute to the inquiry and urged others in the dairy industry to work together to solve issues currently affecting the sector.
“It’s vital that we uncover all the inefficiencies and inequities our dairy farmers face, and we agree an in-depth and independent inquiry will achieve a thorough and fair result,” he said
The ACCC must provide its final report to the treasurer by November 1, 2017. A separate ACCC investigation is ongoing into milk price cuts announced earlier this year by Murray Goulburn and Fonterra.