Australia’s milk pool set to shrink with

Australia’s milk pool is set to shrink this calendar year, despite record prices at the farmgate.

Australia’s milk production is forecast to evaporate in 2023 despite record high farmgate figures, with NSW drying the fastest.

New figures from Dairy Australia tracking monthly output revealed the nation’s farms produced 4529 million litres between July and December 2022, down more than seven per cent year-on-year.

Leading the decline was flood-ravaged NSW, which produced 521 million litres in the first half of this season, compared to 592 million litres during the corresponding period in 2021, a 12 per cent cut.

Victoria’s milk pool also evaporated but not to the same extent.

The Garden State pumped out 2959 million litres between July and December 2022, a 7.5 per cent cut compared to the 3199 million litres pumped out in the second half of 2021.

United Dairyfarmers of Victoria president Mark Billing said workforce shortages, exorbitant energy costs and wider agribusiness trends were factors in the dairy figure decline.

“Electricity, gas — energy costs have been a big issue for dairy in 2020, 21 and particularly last year. We’re seeing some easing of those rises (in power prices) but that’s still a consideration for farmers wanting to downsize, retire or change the way they farm,” he said.

Australia’s milk pool is set to shrink in 2023, following on from a long-term trend. Picture: Zoe Phillips

In Queensland, 149 million litres were produced between July and December 2022, a near 10 per cent cut in production compared to the 165 million litres that flowed during the same 2021 surveyed period.

eastAUSmilk co-chief executive Shaughn Morgan recently told members the production decline numbers were a cause for concern.

“It has been suggested by some dairy commentators that the milk production for 2022/2023 may fall beneath 8 billion litres for the first time since the 1992/1993 (financial year),” Mr Morgan said.

“(That’s why) the upcoming milk supply agreement negotiations between dairy farmers and processors for a fair and profitable farmgate price is essential for retention of dairy farmers.”

Smaller milk markets registered similarly smaller declines. Western Australia pumped out 178 million litres between July and December 2022 compared to 181 million in the last half of 2021, a two per cent decline.

Tasmania’s output barely altered year-on-year, hovering around 475 million litres.

Processors have reacted to tight milk supply this financial year by increasing farmgate offering as well as closing manufacturing sites.

In November, Saputo management announced it would close its Maffra plant and shutter bulk powder production at its Leongatha site.