Australian milk pool 2024-25: National forecast lowered

Expectations of improved dairy production numbers have been dashed. Here’s why forecasters say the milk pool is evaporating.

Dry conditions and stagnant farmgate prices are pointing to a contracting national milk pool this season, analysts are forecasting.

Dairy Australia has projected the milk pool for the 2024-25 financial year will likely clock in at 8.3 billion litres by June 30 next year, down marginally from last year’s tally of 8.376 billion litres.

However, initial expectations of a boost of tens of millions of litres extra in the national milk pool have been dashed by drought setting in across several different dairy regions nationwide.

West Australian dairy farmer Ian Noakes said he was not surprised by the downcast milk pool expectations.

“Farmers in WA are getting about 70 cents a litre for milk. Look at NSW and it’s at least 80 if not 85 cents a litre, so there’s a significant price gap there,” he said.

“We recently had the results of the WA Farm Monitor Project and half of farms that responded said they wouldn’t be able to make a living this season. I understand it’s a similar problem in other parts of the country — farmers have to be profitable if Australians want a functioning dairy industry.”

The smallest milk pool in recent seasons was the 2022-23 financial year at 8.125 billion litres, the lowest since the 1994-95 season when it tallied 8.2 billion litres.

Southwest Victorian farmer Nick Renyard said fodder prices were rising and homegrown feed was patchy for many primary producers.

“There’s been some rain here and there but not enough for many farmers to make up for the green drought this year,” he said.

“Prices are another factor — in any business, confidence is key. Farmers would like the processors to show some courage at the farmgate. International market conditions are heading in the right direction, so hopefully that translates to the farmgate in the new year.”

Northern NSW farmer Tim Bale said while prices weren’t as pressing in his region due to Norco’s strong farmgate presence, other factors such as input costs and labour shortages also played a part in the milk pool evaporation.

“It takes a long time for farmgate prices to crawl up and only a day for them to come crashing down,” he said. “Fortunately, Norco kept their prices at the same level as last season, so that maintained a sense of confidence in the industry.

“Our season has been good compared to other parts of Australia — we had 30mm recently and more rain is on the way. But input costs and a shortage of dairy workers is a problem here like elsewhere in Australia.”