VICTORIAN FARMERS are planning a cautious return to higher milk production, according to the latest Situation and Outlook report released by Dairy Australia. The survey revealed a third of farmers expected to grow their herd size in the next 12 months and close to two thirds anticipated their production to increase in the next three years, which signals a modest growth in milk volumeto around nine billion litres for the season ahead.
National milk production for the 2016–17 season is expected to be down about 7.5 per cent on the previous financial year to about 8.95 billion litres. Dairy Australia managing director Ian Halliday told the Murray Dairy Business Forum in Shepparton the survey revealed profitability was at a three-year low, with about 45 per cent of farmers surveyed anticipating a profit in 2016–17.
Meanwhile, input costs are a more immediate bright spot. Record international production and strong harvests in Australia have kept grain prices contained. There has been little change to the hay market in the past few months with subdued demand, ample supply and low prices. Most irrigation systems are expected to receive a high seasonal determination in 2017–18 and temporary water prices ended the 2016–17 season well below the $100/Ml mark.