Dairy price rise hope

Optimistic outlook: Leo Argento is expecting higher milk prices over the next six months.

DAIRY farmers are optimistic prices will improve in the second half of the 2012-13 milk season.

A wet and cold winter was the precursor for a difficult first half of the season, with farmers disappointed with returns.

Peter and Wilma Mackay of Poowong have been supplying milk to Burra Foods for more than 20 years.

“The season so far, to be honest with you, the milk price generally is not what is needed for the industry to thrive. If they want to attract good quality young farmers, then things need to pick up,” Mr Mackay said.

“Saying that, I regard Burra Foods as a really good company to supply. They do a good job on the export market and target high value products, which I think is the way to go.”

Mr Mackay said with the milk price where it is, most farmers are probably doing little more than breaking even at the moment.

“The actual per litre price is still well under 30c, which is just not enough,” he said.

“They are talking about things picking up, but what happens is really in the lap of the gods. It does depend on the export market, New Zealand and things like that, but they are saying it will pick up in the second half.”

Mr Mackay experienced a tough, wet winter.

“We are going all right now though. We have got really good feed coming through. We have also had quite a bit of rain into December which has kept things bubbling along quite nicely,” he said.

“We are down a few head as we chose to take advantage of a strong export market, but our milk production is still quite good, so I think we did the right thing.”

Outtrim dairy farmer and Fonterra supplier, Andrew Lamers also said the first six months of the season were pretty tight.

“It was wet up to the end of October and then it dried out quite quickly through November and December. Forage and hay levels are down as a result,” he said.

“On average, the milk price has been a bit lower this year and at the moment, people are probably only keeping up with costs.

“This year we are milking a few less cows due to the increase in grain prices, but in saying that, production is probably up a bit.”

Mr Lamers is hoping the rest of the summer remains mild, which will help in the lead up to what is expected to be a decent autumn season.

“A good autumn could lead to an increase in price, which will be good as it will give us the chance to catch up a bit,” he said.

“We are still expecting a few more step-ups this season and the way things are looking at the moment, next season is shaping up to be an improvement too.

“We will just have to keep going, hope the weather is in our favour, keep controlling our costs and hope things are better pricewise.”

Leo Argento from Wooreen is glad winter is behind him.

“The wet conditions increased our workload, pasture damage was greater than in other years and hand feeding went on for longer,” the Murray Goulburn supplier said.

“It also dried off relatively quickly. It has been a difficult year to maintain pasture quality, but it has been easier on the sloping country than on the flat.

“Combine that with a very low spring milk price, cash flow has been very tight and has put extra pressure on the livestock.”

Mr Argento said December rain was appreciated.

“We are looking forward to an increase in milk prices over the next six months, which may help us to make some ground back,” he said.

“Most of us probably can’t wait to put this season behind us, but we look forward to more favourable seasonal conditions, and a more favourable milk price.

“It would be very difficult for young people with high commitments to break even for the first six months of the 2012-13 season.”

His outlook for the remainder of the season in more positive, and said improved export prices for dairy commodities should flow on to a higher milk price for the latter half of the year.

“We knew well in advance that it would be a survival only year, not a year to make capital investments and that has proven to be correct,” Mr Argento said.

“On a brighter note, nothing ever stays the same in farming and we are forever optimistic.”

Short URL: http://thestar.com.au/?p=6049

Posted by on Jan 8 2013. Filed under Rural News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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