Murray Dairy farmers losing confidence in industry, processors

By Rodney Woods

More than 40 per cent of dairy farmers (44 per cent) in the Murray Dairy region have changed or have considered changing milk processors and more than one in five have made plans to exit the industry in the past 12 months.

That is according to the 2018 National Dairy Farmer Survey which was published in Dairy Australia’s Dairy Situation and Outlook Report for June 2018.

The survey showed that 40 per cent of farmers from the region felt fairly negative or very negative about the industry, an increase of nine per cent from the 2017 survey.

‘‘Low farm gate prices was the main factor impacting on negative sentiment among farmers in the Murray region, followed by high input costs,’’ Dairy Australia senior industry analyst John Droppert said.

‘‘Uncertainty around the Murray-Darling Basin Plan has also been weighing heavily on the region’s farmers but the recent decision to pursue off-farm water recovery projects was a welcome development.’’

Despite the lack of confidence in the industry, 60 per cent of Murray Dairy’s farmers expect a profit in 2017-18 after only 44 per cent made one in the year prior.

Commenting on the current situation, Mr Droppert said poor spring conditions in the Northern Hemisphere had hit global supply, putting upward pressure on commodity prices that was expected to flow through to local farm gates.

‘‘Six months ago, a predicted over-supply coming out of Europe was weighing heavily on milk price forecasts, particularly for the Murray Dairy region and other export-focused regions,’’ Mr Droppert said.

Poor seasonal conditions meant that over-supply never eventuated and, while risks remained, Mr Droppert said the global supply situation was likely to remain in check for some time.

The report showed that wheat prices in the Goulburn/Murray valley had increased by 41 per cent in the past year to $292/tonne as of April 2018, while hay prices ($110/tonne) dropped 11 per cent in the same period.

Water traded at an average price of $95/Ml, as of April 2018, in the past 12 months in northern Victoria, down by one per cent from last year and down 17 per cent across the past five years.