It’s ‘one of the best’ for dairy

THERE was more upside than not for dairy farmers this year despite a raft of challenges.

Underpinning the positivity were good milk prices, strong returns for excess cattle and a season that was largely kind to most of eastern Australia.

Balancing the upsides have been labour shortages and a wet spring, which took some of the shine off the positive sentiment within the industry.

Dairy Australia senior industry analyst Sofia Omstedt said 2021 would go down as “one of the best years in recent memory” for many dairy farmers.

Ms Omstedt said a 7 per cent year-on-year lift in milk prices, favourable seasonal conditions in the first half of the year and subdued input costs resulted in one of the most profitable years on dairy farms since 2013-14.

While the wet spring had caused issues with flooding and haymaking, she said it also replenished water storages and dampened irrigation water costs.

Milk prices had been underpinned by a weaker Australian dollar and competition between processors to secure milk.

“Global demand for dairy has remained incredibly resilient during the Covid-19 pandemic and grown in the past three months as more countries emerge from lockdowns,” Ms Omstedt said.

“As Australia’s milk pool remains stagnant and is looking unlikely to grow this year, fierce competition for milk among processors is likely to continue to be a feature of the processing landscape going forward, which is supportive of farmgate milk prices.”

Australian Dairy Farmers president Rick Gladigau, from Mt Torrens in South Australia, said the seasonal challenges in some areas could not be downplayed. “In

NSW and parts of Queensland, they have had fires and have floods, droughts, mice, they’ve had everything,” Mr Gladigau said.

Finding labour was also a major issue — a lack of backpackers and border restrictions through Covid-19 taking a toll.

But good milk prices were a balm to these pains. “Prices are pretty good — of course we’ll always take more — and it’s the third year in a row prices have been up, and next year we are still talking a similar thing,” he said. “In all my time in dairying, the past couple of years have been one of the better continual times we have had in terms of reasonable seasons, pretty good milk prices to go with it.”

Mr Gladigau said input costs for the new year were a concern, especially fertiliser and chemicals.

Farmer optimism about the industry was varied.

Confidence in dairying is there, but it’s not stopping people leaving the industry — older farmers who have gone through the cycles before are seeing great beef prices, people wanting to buy land and cows, and high milk prices, so some are choosing to get out at the top,” he said. “It’s turned out a pretty good year ... if you consider milk price, wishywashy season for some, good cattle prices — it’s been one of the better ones I’ve had.”

Source: Fiona Myers, Weekly Times, 15 December 2021