Herd numbers have reduced by 40 per cent and milk production has decreased on nearly 50 per cent of farms in the Murray Dairy region over the past 12 months, according to Dairy Australia’s latest Situation and Outlook Report.
The report included results from February’s National Dairy Farmer Survey, which found 65 per cent of respondents in the region were ‘fairly negative’ or ‘very negative’ about the industry, up from 40 per cent on the previous year.
The negative sentiment being felt by Murray Dairy farmers is significantly more than those in western Victoria or Gippsland.
The report said the greater negativity in the Murray Dairy region had been caused by issues with cost and availability of irrigation water, dry conditions and increased production costs.
‘‘Northern Victoria has had a particularly challenging season, with a combination of expensive purchase feed, dry conditions and high irrigation water prices driving production down by about 20 per cent compared to the 2017-18 season,’’ Dairy Australia senior industry analyst John Droppert said.
‘‘Looking ahead, profitability challenges are set to continue, however, higher farm gate prices will provide some relief across the industry.’’
The average price of traded water, as of April, was $353/Ml for northern Victoria, an increase of 255 per cent compared to April last year and a 111 per cent increase on the five-year average.
While in the Murray Irrigation System, the average traded price for water, as of April, was $337/Ml, up 260 per cent on the same time in 2018 and 132 per cent on the five-year average.
Feed prices have also increased in the Goulburn and Murray valleys, with cereal hay selling in April for $369/tonne, a 26 per cent increase compared to April 2018, while wheat was selling at $390 in April, a spike of 255 per cent on the price of 12 months ago.
Looking forward, northern Victorian and southern Riverina dairy farmers will be looking for follow-up rains for further pasture growth and to increase storage levels.
‘‘Winter rain is becoming increasingly important as water storage levels across northern Victoria and southern NSW continue to fall,’’ the report said.
‘‘The warm and dry start to autumn placed further pressure on storage levels.
‘‘Some rainfall throughout May has helped moisten soils although it’s done little to boost storage levels.’’
Meanwhile the need for bought-in feed is likely to ‘‘remain firm’’, with the current weather forecast predicting a high chance of drier than average conditions in the eastern states.
Overall, only 34 per cent of Australian farmers feel positive about the dairy industry and only 43 per cent are expecting an operating profit in 2018-19.
■To read the full report, visit: www.dairyaustralia.com.au/industry/dairy-situation-and-outlook/situation-and-outlook-june-2019