A boost in cow numbers has helped Tasmania reach a new milk record

Dairy production across Tasmania is set to reach a new record high thanks to an unusual combination of factors.

Cows heading to the dairy for milking at Sheffield. Picture Chris Kidd

Tasmania’s dairy industry is on track for record milk production this season after outperforming regions across the country.

Current production levels indicate Tasmania will produce about 950 million litres of milk this season, smashing the previous record of 913 million litres.

DairyTas regional manager Jonathan Price said the increase is due to a combination of factors, including a lift in cow numbers across the state which have increased to 177,000.

He said high milk prices over the past year had helped offset input costs and good seasonal conditions during autumn had also encouraged farmers to increase production.

The latest industry production figures to the end of April show Tasmania is the only state to record an overall increase in milk production so far this season.

Farmers across the state enjoyed one of the best autumns for years, which boosted production during March by 11.9 per cent and 11 per cent during April.

Year to date production across the Tasmanian industry is tracking 4.8 per cent higher compared to last year.

Across the national industry, seasonal conditions have also played a role in milk production recovery according to the latest Dairy Australia Situation and Outlook report.

The reports says improved seasonal conditions have also had a positive impact on farmer confidence.

Tasmanian dairy producers remain the most optimistic in the country with about 90 per cent of those surveyed indicating they are confident in the future of their businesses.

After a challenging start to the season, the report says national milk production has increased year-on-year for the past five months to April.

This has seen Dairy Australia adjust its milk production outlook for 2019–2020 and it is now anticipating a fall of just 1-3 per cent on last year to between 8.5 and 8.7 billion litres in total.

While COVID-19 has negatively impacted global demand and commodity pricing due to markedly reduced activity in food service channels like restaurants and cafes, Australian retail demand rose as consumers stocked up on dairy products.

Long life milk was one of the most popular products and sales surged 76 per cent at the outset of the virus.

Sales volumes of and fresh milk, yellow spreads, cheese and yoghurt sales volumes also remain elevated.

Dairy Australia’s Senior Industry Analyst, Sofia Omstedt said better conditions and improved confidence have resulted in a significant recovery in Australia’s milk pool.

“With more manageable input costs, generally favourable seasonal conditions and relatively strong farmgate milk prices this season, overall industry confidence has improved.,” she said.

“The initial spike in retail sales due to COVID-19 indicates strong underlying demand for dairy. However, Australia is not immune to the growing headwinds facing global markets. The economic fallout of the crisis is expected to generate reverberations and reduce consumers’ purchasing power in key markets.”

The report notes that Australia’s milk production recovery remains localised and is mainly driven by strong growth in Tasmania and Victoria.

However challenges remain for farmers in some areas after two years of dry conditions and high costs. Favourable weather conditions have also seen an improvement in farmer sentiment.

Conducted in February, the National Dairy Farmer Survey included in the report shows that 44 per cent of farmers are positive about the industry’s future, up just 10 per cent from last year.

More farmers are feeling confident about their businesses, see production increasing and expect higher profits.

A supplementary survey in early May showed around 20 per cent of farm businesses had been impacted in some capacity by COVID-19, such as sourcing farm materials.

While the initial panic that followed the outbreak has begun to settle, global dairy demand remains under pressure.