Slight growth expected in national milk production

The report confirmed Australian milk production had grown in each month of this season.

Dairy Australia analysis and insights manager Eliza Redfern said there was an air of optimism among Australian dairyfarmers.

"Better-than-expected weather conditions, recovering milk production, increased retail volumes and a rebound in global commodity values have bred optimism in the broader context of a persistently-challenging macroeconomic environment," Ms Redfern said.

"The Australian domestic market continues to perform strongly for the dairy supply chain, with the volumes sold of cheese, dairy spreads and yoghurt growing 1pc, 0.4pc and 5.7pc respectively, in the 12 months to January 28."

In terms of exports, the report stated a drop in global milk supply over recent months had led to an export commodity price rebound.

Looking ahead, Ms Redfern said weak global supply growth was expected to remain the largest supporting factor, while global demand remained pressured by the challenging economic environment.

Drought conditions affecting water availability for the Panama Canal locks and tensions in the Red Sea causing vessel delays had tightened container availability and bloated freight costs.

"The weak global economy continues to limit importing activity from buyers in key dairy export markets, while shipping challenges along major trade routes have created an uptick in demand for Oceania, and therefore Australian product," Ms Redfern said.

In Vic, WestVic Dairy chair Brendan Rea, Allansford, said farmers had faced some tough and challenging seasons in the last couple of years, even though farmgate milk prices were good.

Mr Rea milks a 1000-head herd.

"Costs are up, farmers haven't really been able to take full advantage of the high prices," he said.

"Costs look as though they are easing a bit now and the hope is for a strong opening milk price."

He said farmers were also looking for a good autumn break.

He said one of the biggest constraints was still labour, which was affected by the availability of housing in regional and rural areas.

"We are hoping governments can help the industry work through those constraints," he said.

He said housing issues had been exacerbated during and since the COVID-19 pandemic.

"A lot of people shifted to the regions, and it's made it harder, as it took a lot of housing supply off the market," he said.

"It's a wonderful region in which to produce milk, with an incredible potential due to its good soils and natural rainfall.

"I think the future is bright for our region."

He said WestVic Dairy was looking at the courses it could run to attract and upskill workers.