Milk supply falling but prices still strong

THE latest RaboResearch Australia Agribusiness Monthly has noted that despite a strong footing, Australian milk supply started 2022/23 on a weak note. 

National milk supply fell four per cent last season and is down more than 8 per cent to start the season (albeit on a low volume base).

Following ABC Country Hour who recently spoke with Lockington dairy farmer, Paul Weller, former United Dairy Farmers of Victoria President, who said the milk prices are the best they’ve ever been, on a par cost/income ratio with the best period in the 1980s. 

The Sentinel-Times caught up with local Gippsland dairy farmer Benjamin Vagg to see if the hype is balancing the reality, and whether this new level is sustainable going into the future.

“Milk prices are at a record high, as far as I can ever remember, but commodity prices are through the roof as well,” Benjamin said.

“Grain prices are starting to reverse, and it all depends on what happens in the domestic market production and this rain – that’s a recent development. Everything has moved up.

“There are a fair few people who held their production in August (affected by the wet). We’re in that boat, a couple of people with free draining soil have fared better than us – but there was a lot of mud around (August) and it was not enjoyable.”

With 450 head, the ground is drying out, but the hooves are still soft.

“Everything has started to dry off now, so it is really starting to affect us.”

“We don’t really need the rain we’ve had the last 24 hours and over the weekend – we need it in a fortnight’s time.”

And whilst silage may have started growing well the last 8-10 days, for Benjamin and his team getting the silage off the wet paddocks will be the next challenge to come at them.

“The last couple of years has been the October rush.”

And with many young farmers having a shot at the industry, Benjamin also highlighted the decline.

“There is still progress (for us) in a declining milk pool. There seems to a lot of young fellas having a crack, but there are still a lot of exits. The next generation who were raring to go have had enough.

“There’s an interesting piece in the labour market – I don’t understand what everyone is doing because no-one is working but there are plenty of people around.”
With four individuals including Benjamin, he could use another full timer.

“I could easily put another full timer in there to take some of the pressure off myself and another person, every business has those people who are willing to work a bit more, but it would be nice…”