With farmer confidence and consumer optimism high, much of Australia’s dairy industry has been riding on a wave of positivity over the past few months, according to Dairy Australia’s June 2021 Situation and Outlook report. Improved operating conditions, robust domestic demand and supportive global fundamentals have continued to underpin a reasonably strong market outlook.
Dairy Australia senior industry analyst, Sofia Omstedt, said “A vast majority of farm businesses are expecting to make an operating profit this season, and having seen favourable weather conditions, industry confidence has bounced back. Several factors, including higher opening milk prices in 2021/22, suggest this momentum could be maintained well into next season.”
Favourable operating conditions have had a substantial impact on industry sentiment, as demonstrated by the latest National Dairy Farmer Survey (NDFS) which shows that 64 percent of farmers are feeling positive about the future of the dairy industry, up 20 percent from last year. Furthermore, 88 percent of respondents are anticipating making an operating profit in 2020/21, with 63 percent of these farmers expecting profits to be higher than the five- year average.
National milk production is expected to be stable in 2020/21, with minimal volume change compared to the season prior. Looking ahead, several factors point to possible modest milk production growth in 2021/22.
In light of otherwise supportive conditions, high beef prices and strong land values have continued to weigh on the national dairy herd and encourage farm exits, whilst flooding and the ongoing mouse plague have presented acute issues in the affected areas. The lack of available workers remains a concern across the country.
