Data shows big gains in milk pool recovery

Dairy Australia senior industry analyst Sofia Omstedt said initial estimates for the 12-month period were for a further decline of 3-5pc, while updates in March/April forecast a drop of 1pc.

"This is well above expectations," she said. "The recovery basically since February has been phenomenal."

Even with the turnaround, the preliminary milk total of 8.775 billion litres is still Australia's lowest in nearly 25 years, with Ms Omstedt saying production was last so low in about 1995-96.

"It's still a lot lower than it has been for decades but we have started to see the recovery," she said.

"If you look at the last financial year, with the significant shortage of feed to drought to where we finished the year, it has been a very significant recovery in Australia's milk pool."

Ms Omstedt said the recovery came on the back of a strong autumn break across south-eastern Australia, with the Gippsland district in Vic lifting to finish 8pc up on the previous year, including a lift of 13pc for June, compared with June 2019, while Tas production lifted 4.4pc for the year.

This same recovery was seen in all Vic regions, SA and parts of southern NSW, which all enjoyed improved conditions.

Overall Vic production lifted 0.8pc on 2018-19, while NSW finished down 3.6pc.

After SA started the year with a 9.7pc decline in July 2019, there were several months of dropping figures before production started to increase again in January, including a 9.7pc lift in June this year, with a final pool just 1.7pc down.

But not all dairy regions benefited from improved seasonal conditions.

In Qld, preliminary figures place that state 12.9pc down on the previous year.

Ms Omstedt said without good seasonal conditions, Qld dairyfarmers had been reliant on purchased feed along with other high input costs, putting pressure on production.

WA also suffered from a delayed autumn break. After a year of dropping figures, it finally had a lift of 0.9pc in May and then 6.7pc in June to finish the year 2.7pc down.

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One factor that made the pool drop so quickly at the start of the financial year was significant herd reduction, partly buoyed by a strong beef price.

"We definitely saw an increase in culling at the start of last financial year, in the first six months, particularly in western Vic and SA," she said.

Ms Omstedt said they were still waiting on complete data but anecdotal evidence suggested a number of farmers had begun restocking and building their herds again in recent months.

She said another factor driving production upwards was returns.

"Last financial year we had one of the strongest - relatively - farmgate milk prices that we've seen in the past few years," she said.

While still just one month into the new financial year, Ms Omstedt said the initial forecast was for growth to continue between 1-3pc for 2020-21, but this would be revised as the season continued.

SA Dairyfarmers' Association president John Hunt said the past 12 months had been full of "trying times", with bushfires in key dairy areas as well as prolonged drought, but a big contributor to the recovery and uplift was "not too bad" farmgate prices, on top of a good autumn.

"Confidence does drive everything," he said.

He said the season was again turning drier in the South East, which would place some pressure on inputs, such as irrigation, but he was still hopeful, saying SA was "due a good year".

Bletchley dairyfarmer Rodney Frahn, who milks about 270 cows year-round with brother David, said their production in recent months had really picked up.

He said at this stage, production was up 35pc, compared with this time last year.

The Frahns usually grow their own crops for feed with excess sold on, but a tough 2018-19 growing season, combined with needing to resow some irrigated pasture, meant they had to buy feed in during the 2019-20 financial year.

But Mr Frahn said as they had more feed options available, they made the most of it and fed out extra silage, with the cows "responding".

"They've rewarded us with extra milk," he said.

He is hopeful the better season will continue.

"This year, the way it's going, might be a better year, but it depends on spring rain," he said.

The Frahns supply "good, SA family-run business" La Casa Del Formaggio and said there was good demand for their milk.

Mr Frahn said the panic buying earlier this year also included cheeses, and there had been good demand for milk across the board.

He said this was all helping him keep his confidence in the industry.