Confidence levels for southern farmers have plummeted.
The short to medium term future looks particularly tough for farmers in the southern export-focused states of Victoria, Tasmania and South Australia, according to analysis by Dairy Australia.
Following a challenging, dry season, many farmers in southeastern Australia are staring down the barrel of significant financial losses.
This has come about due to farmgate price cuts by some processors and expectations of a much lower opening price for 2016/17.
Although far from immune to such market pressures, those focused on the fresh milk market in northern and western regions of Australia are yet to be directly affected.
Confidence levels for southern farmers have plummeted. As part of Dairy Australia’s Situation and Outlook June 2016 report, the National Dairy Farmer Survey (NDFS) is carried out to gauge behaviour and attitudes of farmers across Australia.
At the time of the 2016 NDFS, conducted in February and March, the proportion of farmers feeling positive about the future of the industry dropped from 74% last year to 67%.
A recent supplementary survey suggests the number of farmers feeling positive about the industry has now dropped below 50%.
Dairy Australia senior analyst John Droppert said underlying tension across the industry in the export-focused states had been amplified and brought to the surface by the recent price cuts.
“The survey highlighted confidence in the future of the industry is lower across Victoria than it has been for the past few years,” Mr Droppert said.
“Since then, late season cuts to farmgate prices have caused a significant further decline in sentiment across most regions, which follow up research is currently attempting to quantify.”