Falling milk supply forecast

By Rodney Woods

Katunga dairy farmer Daryl Hoey said there were no surprises in Dairy Australia’s recently released Dairy Situation and Outlook report.

The October report forecast milk production to fall eight billion litres or five to seven per cent on last year’s production figures.

While it was still only a prediction, Mr Hoey said this drop could be possible.

‘‘It’s a projection at this stage,’’ he said.

‘‘With the numbers of cows farmers have reduced their herds by it is not out of the equation.

‘‘It will depend on when we get an autumn break and how we respond later in the season.’’

In response to Dairy Australia’s senior industry analyst John Droppert’s comments on the importance of planning for when conditions improve, Mr Hoey said how quickly milk production for farmers turned around would depend on how many of their young stock they could retain during the current conditions.

‘‘People are now making decisions on how many cows they reduce their herd by this year and then their young stock,’’ he said.

‘‘If farmers can retain as many of their young stock (as they can), the quicker the response will be.’’

The high prices of water ($321/Ml) and feed prices above $400/tonne (shredded cereal hay at $402/tonne and stockfeed wheat at $425/tonne) were putting further pressure on farmers during the current dry conditions.

‘‘I think people are making judgment calls on whether they can make summer crops with water prices the way they are,’’ Mr Hoey said.

‘‘The long, hot, dry summer (that is forecast) is certainly going to put pressure on farmers.

‘‘People are going to have to make sure they have good enough quality hay and silage or buy water to invest in summer crops.’’

Despite the dry conditions and escalating water and feed prices, Mr Droppert said there was some positive news, with domestic sales markets strong, seeing an increase of 0.9 per cent in Australian milk, cheese and yoghurt sales.