One of the best autumn breaks of recent times has supported a significant recovery in national milk production and boosted dairy farmer confidence in many regions, according to Dairy Australia’s June 2020 Situation and Outlook report, against a backdrop of uncertainty in dairy markets from COVID-19.
After a challenging start to the season, national milk production has increased year-on-year for the past five months to April, leading Dairy Australia to moderate its milk production outlook for 2019–20 upwards to a drop of just 1-3 percent on last year to between 8.5 and 8.7 billion litres in total.
While COVID-19 has negatively impacted global demand and commodity pricing due to markedly reduced activity in food service channels like restaurants and cafes, Australian retail demand rose as consumers stocked up on dairy products. Long life milk sales surged 76 percent at the outset of the virus and fresh milk, yellow spreads, cheese and yoghurt sales volumes remain elevated.
The report notes that Australia’s milk production recovery remains localised and is mainly driven by strong growth in Tasmania and Victoria. Challenges remain for farmers in some areas after two years of dry conditions and high costs.
Favourable weather conditions have supported improved farmer sentiment. Conducted in February, the 2020 National Dairy Farmer Survey included in the report shows that 44 percent of farmers are positive about the industry’s future, up 10 percent from last year. More farmers are feeling confident about their businesses, see production increasing and expect higher profits.
