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Higher farmgate prices lead to increased dairy confidence

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Dairy Australia released its Situation and Outlook report today which indicates a positive consensus for the industry’s future amongst the nation’s dairy farmers.

The report stated that 73 percent of farmers surveyed were positive about the industry’s future and that 40 percent were considering farm investment.

Norman Repacholi, an analyst at Dairy Australia, said the survey indicated that farmers had intentions to increase production over the next three years, the Weekly Times Now reports.

"Overdrafts have increased by $70,000-$150,000 in some areas and that will take a bit of time to digest," he said.

"From a financial perspective, some areas that didn't (take such a financial hit) are rebooting expectations of investment on-farm, infrastructure on-farm outside of the dairy."

Dairy Australia has also forecasted milk production growth to increase by two percent to approximately 9.5b litres this season.

Dairy giant Fonterra Australia announced an increase of 16 cents per kilogram of butterfat and 40 cents per kilogram of protein for the 2013/14 season for Victorian and Tasmanian suppliers late last week.

Fonterra say that the price increase was possible due to strong and consistent international dairy commodity prices, coupled with the fact that the Aussie dollar has steadied at lower levels.

The strong outlook serves as positive news for the industry, who had recently suffered from price pressures relating to $1 milk deals with supermarket giants Coles and Woolworths.

Image: www.ninemsn.com.au

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