This season dairy farmers across Victoria and the southern Riverina are looking at near record prices — and water, the bane of dry years in the Murray-Darling Basin, should be more available.
“There's certainly plenty to be optimistic about,” Mr Emmett said of the new season.
“Milk prices are as high as they have ever been, with conventional farms getting $7.50 to $8/kg.”
While the pastures on Shenstone Stud, operated by Mr Emmett and his parents Lyn and Gordon, have been struggling through a dry winter, improved rainfall in June and July is freshening up the paddocks.
“With the rain, the season is looking better.”
He also pointed to the negative Indian Ocean dipole (the difference between sea surface temperatures on the tropical western and eastern side of the Indian Ocean) meaning a promise of improved rainfall.
The Rural Bank Outlook notes that supply growth will be assisted by strong milk prices and favourable levels of feed.
“However, lower feed and water prices are expected to be partially offset by higher fertiliser costs,” the report notes.
“In global markets, strengthening demand for finished dairy products, particularly from Asia, is expected to underpin historically high prices.”
Better water availability in northern Victoria this season means reduced water costs and good winter rains will boost crops, which should contain feed prices for dairy.
In the Dairy Australia Situation and Outlook report, about 37 per cent of Murray region dairy farmers expect to increase their herd size this season.
The certified organic Emmett farm is running about 115 cows in July and they expect to build up to a 220 peak, the highest they have reached, based on the expectation of a better season.
Organic milk prices tend to run several dollars higher per kilogram than conventional farm systems, due to the retail price differences and higher input costs.
Curiously, Mr Emmett points out that the difference had shrunk at the start of this season to an average of about $1.50/kg. He puts this down to supply and demand — mainstream milk is in short supply but more organic farmers are looking for processors due to the failure of a major organic processor last year.