Milk volumes down

By Brian Tessmann, QDO President

The latest Milk Production Report from Dairy Australia are of interest if Australia is to meet the opportunities arising for dairy through the recent Free Trade Agreements. The report shows that nationally milk production for February was down 1.5% and the national year to date (YTD) volume was down 0.7% compared to last year. At the state level Victoria saw an YTD drop of 1.8% and -3.3% compared to last February.

Here in Queensland our YTD milk production is down 2.4% which has been replaced with milk hauled in with high transport costs from southern states. This further reduces the milk available for export manufacturing. If this trend continues Queensland will be up to 30% short of milk supply to meet its local consumer needs this year.  

Tasmania and Western Australia (WA) have seen increases in milk production 2.4% and 13% respectively for February. WA’s YTD milk production increased overall by 6.5%. Clearly a significant part of the production increase in WA stems from the autumn price incentives WA, like Queensland, is mainly reliant on the domestic market and this pricing structure has assured milk processors there is no need to transport milk across the Nullarbor into WA.

Some processors have had a similar but more limited scheme in Queensland starting last year. However the damage inflicted on this states producers since the supermarket milk price war and $1 milk in 2011 has meant a continued loss in overall Queensland dairy farm numbers.

These market issues and Australian production figures are particularly relevant at this time as some processors and collective bargaining groups are heading into their future milk supply contract negotiations. While some conditions have changed, farmers in Queensland still have the ability to respond like farmers in WA have, but they need the market to respond with simular price incentive increases to those we saw in the west if we are to turn around this states milk supply woes.