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Dairy Disaster Looming?…No Icecream this Christmas!

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The well documented Murray Goulburn milk price reduction and clawback coupled with Fonterra’s price reduction has seen many farms across Victoria and SA leaving the industry, some through bankruptcy while others believing that the industry had a limited future for families and the associated mental health and social issues being reported in dairying regions.

But a greater problem for the wider community appears to be looming as Milk processors clamber for supplies of a reduced milk output.

Currently Victoria is reporting a 10% reduction this year in available milk while the Shepparton region has seen October milk supply 20% down on last year.

Rural bank analyst Rabobank has predicted a 7% reduction in milk supply this year across Australia despite widespread rain and a good season.

This reduction would put overall milk supply at less than 9 billion litres a 20 year low and has some predicting a price rise for dairy foods at Christmas and into 2017.