While Queensland dairy farmers continue to worry about price drops in the local milk market, the call for supply to meet demand in southern Australia is very much on the rise.
Although the export focused market is coming off a low base following last year’s price drops with Murray Goulburn, the latest Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) report indicates that milk prices in southern Australia are now rising by about 2% and are forecast to rise by another 7% in 2017/18.
These forecasts suggest that milk prices in the region will be headed back to attractive levels as early as 2020.
Meanwhile, milk production in Victoria has collapsed with a fall of 7.2% in January contributing to a year to date (YTD) drop of 9.5%. The drop was particularly severe in Northern Victoria where there was a drop of 17.2% for January and a YTD drop of 17.5%. By the end of the year, the drop could accumulate to include over 350 million litres.
The production drops did not stop at the Murray River either with southern New South Wales dropping a YTD total of 9.7% and 11.4% in January leading to a collective drop of 8.4% across the state for the month. This is predicated to encompass a total reduction of over 70 million litres.
In the past, most autumn periods in New South Wales and Queensland combined did not produce enough to supply their combined domestic demand. On top of this, southern NSW is committed to extracting a significant volume of milk for manufacturers at that time of year.
The southern shortage came into focus last week with United Dairyfarmers of Victoria (UDV) blasted the supermarkets for sourcing cheap international cheese for their stores’ brand after Australian product became no longer available.
Surely then, any northern processor looking to source milk from a weakening southern dairy industry would need the senses of a bloodhound to find any spare milk without a good home. Even them they would need a full wallet to boot.