A2 Milk says it could take years for grazing to resume on flood-ravaged pastures

The group says all its farmers around Lismore are safe with livestock accounted for, but warns the recovery could take years.

ASX-listed A2 Milk says it could take years for grazing to resume in areas that have been flooded. Picture: Dave Hunt/AAP Image

A2 Milk says it will take months, if not years, for grazing to resume on flood-damaged pastures in NSW.

The company sources milk – which Norco processes under contract, from several farms around Lismore – much of which is under water as it battles its worst flooding in history, prompting thousands of people to be evacuated and heartbreaking stories of hundreds of cattle perishing after being washed away.

While an A2 spokesman said its suppliers had “reported they are all safe and stock has been accounted for”, he warned of potential delays in collecting milk and pasture restorations could take years.

“The key challenges the farmers are currently facing are flooded paddocks, severe pasture damage and rising flood waters, which have cut off roads in low-lying areas, restricting access for milk tankers,” the A2 spokesman said.

“With any flooding, be it minor or major, the primary concern is the safety of our farmers and their families and the welfare of stock, ensuring that milking continues as usual. The clean-up process on pastures can take months, sometimes years, before cropping or grazing can resume.

Floods strip significant amounts of nutrient-rich topsoil, resulting in productivity losses for farmers, according to the CSIRO.

“The removal of topsoil is always a loss for agricultural productivity as topsoil is the part of the soil horizon with higher levels of organic matter and nutrients and generally better structure,” the CSIRO advises on its website.

“Also where soil has been removed from actively cropped lands, the fertiliser that has been applied by the farmer has also been washed away. These attributes are slow to replace, if ever, and ultimately reduce yield unless higher levels of inputs are applied, particularly in the short term.”

Lismore’s levee was breached on early Monday morning and the Wilsons River rose to an unprecedented 14.37m, making it the worst flood in the region’s history. It is 2m higher than the previous record peak that was ­recorded ­almost 70 years ago.

Similar to the bushfires in early 2020, A2 also warned of delays collecting milk from farms. Cows must be milked twice a day and if milk cannot be collected for processing or stored on farms, that milk is poured down the drain – which happened during the bushfires.

The A2 spokesman said “our farmers are an important part of the A2 Milk Company, and our farm services team will continue to provide support to our farming families during these challenging times”.

While A2’s Platinum infant formula brand comprises the bulk of its revenue, its fresh milk sales have defied a broader slump in a notoriously difficult category – dominated by cheaper private label products.

As well as its contract with Norco, A2 has partnerships with Ky Valley in Kyabram, which services the Victorian and southern NSW market, and Browns Dairy in Western Australia. The company also sources milk from greater western Sydney, which it processes in-house at Smeaton Grange.

In the six months to December 31, A2’s Australian fresh milk revenue firmed 0.2 per cent to $NZ87.1m ($80.98m).

“The business achieved a new high value share of 12.4 per cent at the end of December 2021 compared to 12.2 per cent at the end of June 2021,” chief executive David Bortolussi said.

“Additionally, three A2 Milk products achieved ranking in the top ten products in the dairy category in grocery.”

Meanwhile, A2 Milk by Anchor in New Zealand market continued to gain market share, with sales up 8.4 per cent.