Milk production decline halted

By Geoff Adams

Milk production in Victoria has shown some signs of recovery, according to the latest report on the state of the national dairy industry.

While northern Victorian farmers are paying up to $600/Ml for water and and north-eastern Victorian farmers were hit by the summer bushfires, Gippsland and Tasmanian producers were lifting milk supply.

The Dairy Situation and Outlook Report found that falling milk production has moderated to a decline of just 3.7 per cent to date.

Volumes in December and January exceeded expectations, with December seeing the first year-on-year increase in milk production in 18 months.

Supply and demand of dairy products is yet to be materially impacted by the developing Coronavirus (COVID-19) outbreak, although most dairy commodities prices have trended lower in recent weeks.

Dairy Australia industry insights and analysis manager John Droppert said many farmers had been able to capitalise on favourable weather conditions and continued high farm gate prices, with the bulk of the milk production recovery centred on Gippsland and Tasmania.

“A recent recovery in national milk production, together with substantially more favourable weather conditions across many dairy regions, have been positive developments at a time of strong local and global dairy market fundamentals,” Mr Droppert said.

Dairy Australia continues to forecast a drop in national milk production of between three per cent and five per cent to 8.3 to 8.5 billion litres for the full 2019-20 season.

This incorporates the potential for further improvements in the event of a favourable autumn, but also recognises the patchy nature of the recovery and ongoing challenges in many areas.

● For more information on the report, turn to page 28.