The price of milk and confidence in the dairy industry go hand in hand, according to farmers who responded to Dairy Australia’s Dairy Situation and Outlook Report that was released last week.
The report, which is published three times a year, summarised the Murray region and stated that confidence in the industry’s future had trended downwards since 2014 but was comparable with 2016 levels.
Katamatite East farmer Richard Curtis said, as a Fonterra supplier, the price was making it tough for the farm he works on.
‘‘It can’t go down too much more. We are just on break-even now, which is making it pretty tough,’’ he said.
UDV West Goulburn branch member and Girgarre farmer Tim Leahy hoped for higher prices as the season went on.
‘‘A lot of farmers who had a gut feeling of lower prices have sold off cattle. As long as we finish above $6 this year that will help rebuild confidence,’’ he said.
Wyuna farmer Russell Pell, who supplies Tatura Milk, described how excited he was when Bega announced an opening price last week.
‘‘It gave me a bit of a spring in the step after the price was announced. It was a little bit better than what I was expecting considering where export markets are,’’ he said.
Mr Pell said despite Murray Goulburn’s low price, other companies had given the dairy industry a much needed lift.
‘‘It (Murray Goulburn’s opening price) was a tough price from where we have come from. It has a major impact on businesses as it’s the difference between a profit and loss. Prices from other companies have given the industry an uplift,’’ he said.
The report also said prices for feed and water were both down, meaning farmers may have some reprieve for the coming season.
‘‘We can’t have high feed costs and a low milk price as it would be the end of us. We can control inputs but we can’t control profit margin. We have to be profitable in this business,’’ Mr Leahy said.
‘‘If they (water prices) stay down, it will be great,’’ Mr Curtis said.
‘‘Price and confidence go together — they are on the same wave length. With cheaper grain, hay and water it should make for a reasonable year,’’ Mr Pell said.