Fewer than half of Australia’s dairy farmers expect to make a profit this financial year, according to new figures from Dairy Australia.
Data from the industry’s peak research body’s annual survey shows 45 per cent of 1000 farmers surveyed nationwide are anticipating a profit for 2016-17.
That’s compared with 62 per cent who made a profit in 2015-16.
Meanwhile, milk volume this year is expected to hit a low of 8.8 billion litres — down 7-8 per cent on the previous year.
The figures will be released in Dairy Australia’s Situation Outlook in the coming weeks, but were revealed at a Senate estimates hearing last night.
Dairy Australia managing director Ian Halliday said particularly dry conditions in 2015-16 had contributed to the slump, as well as last year’s reduction in milk price.
“It’s seasonal conditions, it’s milk price, it’s confidence in the industry for farmers to invest, it’s culling of cows, it’s responding to market conditions,” he said.
Mr Halliday maintained there was still ongoing investment in the dairy processing sector — despite Murray Goulburn’s recent decision to close three plants — and “still a lot of competition for milk”, with global demand increasing at about 2 per cent a year.
“I think one of the challenges we have as an industry is how do we get profitable milk volume growth that then supports demand,” Mr Halliday said.
He said milk volume for 2016-17 was expected to drop 7-8 per cent, following a drop of about 2 per cent the previous year.
“That’s a lot of milk down,” Mr Halliday said.
“We bottomed out at the end of 2009 at 9 billion litres; this year we’ll be down to about 8.8 billion (litres).”
Mr Halliday predicted an uplift in volume next year of about 3 per cent, off the back of better seasonal conditions over the past six months.
Source: WeeklyTimes
