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Costs, Weather Hit Dairy Farmer Confidence and Profits

19 June 2019

AUSTRALIA - Costs are crippling the nation's dairy farmers with only a third positive about the future of the industry.

That is according to the latest Situation and Outlook report released by Dairy Australia today which surveys 800 farmers nationally and provides an insight into global and domestic markets.

The report revealed only 34 per cent of dairy farmers felt positive about the industry in February, this was the lowest recorded since the survey started 15 years ago.

Milk production is also set to drop again, back to 8.1-8.3 billion litres, levels not seen for 25 years.

Outlook altered by weather

Sentiment varied across the country, depending on seasonal conditions, and improved slightly when some farmers were surveyed again in April.

Tasmanian and West Australian dairy farmers are the most positive in the country, with 48 per cent of those surveyed positive compared to the national average of 34 per cent.

In Victoria, Australia's largest milk production state, western Victorian dairy farmers were the most positive at 39 per cent.

But high costs, concerns about irrigation and feed drove down sentiment in the Goulburn Valley and Riverina, where only 29 per cent were positive.

Profit expectations tell a similar story.

Only 21 per cent of survey respondents in the Goulburn Valley and NSW Riverina expect to make a profit this financial year, compared to 60 per cent which returned a profit in 2017-18.

Up to 79 per cent of Tasmanian dairy farmers expect to make a profit this financial year, the same proportion which made a profit last financial year.

Western Victoria has the highest proportion of dairy farmers expecting a profit this season, at 60 per cent, only slightly down on the 68 per cent which made a profit last financial year.

Farmgate milk prices are the most significant driver of negative sentiment in Queensland and northern NSW, followed by the cost of production.

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Source: ABC Online

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