Mixed picture for dairy farm profit
Dairy Australia’s latest situation and outlook report has revealed a mixed picture of farm profitability.
It is expected national milk production will drop to 8.5 billion litres this year.
While many dairy farms in southern Australia are experiencing a favourable season with strong farmgate milk prices and good pasture conditions, farmers in northern areas continue to face drought and high feed and water costs.
The report contains an extensive feature on hay and grain markets, with prices remaining higher than the five-year average in most regions - despite easing by up to 32 per cent and 22 per cent respectively year-on-year.
Despite promising conditions in parts of southern Australia, ongoing challenges in northern areas have seen the national herd shrink further with continued impacts on milk production. Dairy Australia has
reaffirmed its full season production forecast that national milk production will decrease between three and five percent 8.3 to 8.5 billion litres.
Dairy Australia industry analyst Sofia Omstedt said operating conditions for dairy farms were mixed across the country.
“Farmers in many parts of southern Australia are experiencing a favourable season with plentiful pasture growth and some have been able to capitalise on a strong farmgate milk price.
“In comparison, those further north, as well as in areas such as east Gippsland, continue to face ongoing challenges.
Ms Omstedt said the high cost for bought feed had impacted milk production for two consecutive years and was having a significant impact on the capacity for Australian milk production to recover.
“For some farmers, expensive feed will be a nuisance in an otherwise good year; for others it will represent a significant and ongoing burden as they wait for the drought to break,” she said.
Dairy Australia managing director David Nation encouraged farmers to take advantage of resources such as hay and grain reports and one-on-one Taking Stock sessions, in order to stay informed for feed decisions in the months ahead.