Producers on high alert for impacts of farm gate price cuts

Screen Shot 2016-05-26 at 7.20.11 AMProducers in northern NSW, Queensland and Western Australia are on high alert for flow on impacts of the late season farmgate price cuts in southern Australia, despite more stable operating conditions and farmer sentiment.

According to analysis in Dairy Australia’s latest Situation and Outlook report released today, farmgate prices for those supplying the fresh milk market are currently stable, as is farmer confidence about the future of the national industry.

However, Dairy Australia senior analyst John Droppert said there would almost certainly be some flow on effect from lower southern prices to the domestic supply regions.

“These farmers are sitting ok but they are looking nervously on the horizon, scanning for impacts,” Mr Droppert said.

Results from this year’s National Dairy Farmer Survey (NDFS), carried out in February and March, indicated confidence had not dropped from last year.

At the time the farmers were surveyed, about 80% in NSW were positive about the future of the industry, while in Western Australia 70% were positive and more than 50% of Queensland farmers expressed positivity.

The NDFS has been running for 12 years to gauge behaviour and attitudes of farmers across Australia to help inform the Situation and Outlook report.

Despite overall national milk production tracking below the levels of last season since early spring, 2015/16 milk intakes across New South Wales and Western Australia are higher in year-on-year terms. Northern states have had a better season, with coastal parts of NSW enjoying good rainfall and Queensland having avoided both flooding and cyclones. WA has continued to produce standout growth in milk volumes (up 6.9% for the season to March), despite several farms being severely impacted by fires in January, and some processors reducing intakes.