Dairy Australia figures released last month reveal November production had reduced by a fifth from the same time the previous year, with current production levels 13 per cent of 2017-18 levels.
The report continues a trend of shrinking production in the region, which has seen a reduction of more than 113million litres.
Dairy Australia analyst John Droppert said the results would not have been surprising to anyone working in the industry.
‘‘It’s been a very dry spring and although the milk price is quite high, historically, that’s had to contend with high hay prices and dry weather, and high water prices,’’ Mr Droppert said.
‘‘There’s a huge amount of cost being added and that’s led to many dairy farmers reducing their stocking and feeding rates and a number ultimately exiting the industry.’’
Although Mr Droppert said the figures had been slightly inflated due to the strong year experienced last year, he ultimately expected the trend to continue.
‘‘This is the time people start making those tough decisions and we wait and see whether there’s going to be an autumn break and people have had to make tough decisions.’’
Girgarre dairy farmer Tim Leahy said he had seen the impacts of dry conditions and high inputs as his cows went through the dairy.
Milking 450 cows across two farms, Mr Leahy said the price of water had gone ‘‘through the roof’’, putting pressure on everyone.
‘‘We’re experiencing a bit of a drop in production at the moment,’’ he said.
‘‘It’s not much of a drop but that will continue throughout the next couple of months.
‘‘Farmers will do their sums over the next few weeks and months and probably have to make some decisions.
‘‘Farmers will sell their cows before they let them starve.’’
Tatura farmer Michael Tuhan pointed to the number of herd auctions in recent months as evidence of the milk production loss.
He is looking to increase his production but said he had the benefit of a secure high-reliability water allocation.
While milk prices have picked up this season, input costs have risen as well.
Mr Tuhan is disappointed the apparent shortage of milk hasn’t translated into higher prices yet.
However, he is aware that processors dealing with lower milk volumes will have poorer efficiencies in their plants.
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