But despite all expectations for a massive season, milk volumes have risen only slightly.
In DA's latest quarterly Situation and Outlook Report a switch back to grazing, high heifer prices and workforce shortages were blamed for the missed targets.
DA senior industry analyst Sofia Omstedt said despite the favourable conditions on farms, milk production growth was failing to materialise due to a smaller national herd.
“There are also continued farm exits as a result of strong land and beef prices. The distinction between profit and production in debating the performance of the industry is vital this season,” Ms Omstedt said.
This confirmation of there being less milk than predicted is sure to frustrate many farmers who’ve been battling for healthy milk price step-ups this autumn.
So far Bega, Burra, Fonterra and Saputo have announced step-ups.
In northern Victoria water prices are down 81 per cent on last year and 47 per cent compared to the last five years.
The report noted wet weather during late spring and summer had promoted pasture growth, leading to northern Victoria farmers switching away from feeding and back to grazing.
This switch to the cheaper grazing method has lowered the per-cow yields in the region.
In addition to farmers lowering the productivity of their cows, high cattle prices have slowed the rebuild of the national herd.
This is because culling decisions are financially making sense and the purchase of heifers is uneconomical – leaving farmers to rely on replacement calves to come through the herds.
In terms of labour the report said farmers were coming up short without access to international workers.
“In all dairy regions in Australia, labour is highlighted as the most significant challenge,” the report said.
“As a result, many dairy herds are seeing cuts of varying degrees.”
In January 2021 milk production increased by 3.3 per cent, most of that carried by Tasmania, New South Wales and Victoria’s western district.
