In the firing line: The state of dairy

How the 2019-20 bushfire season will impact the dairy industry is yet to be fully understood. Doris Prodanovic speaks to Rabobank and Niche Agribusiness dairy industry analysts Michael Harvey and Andrew Weinert.

The impact of the catastrophic 2019-20 bushfire season on agribusiness and associated industries, including the Australian dairy sector, is yet to be fully realised.

Production drop

In Australia, the ongoing drought has negatively impacted feed costs for livestock and pasture growth.

In the four months of the 2019-20 season, milk production fell by 5.5 per cent – a loss of 190 million litres.

Rabobank senior analyst for food and agribusiness Michael Harvey told Food & Drink Business the company had recently revised down its milk production forecast for Australia, with its latest expectation declining by 5.8 per cent, to 8.3 billion litres. It represents another loss of 500 million litres of milk from the system.

“The majority of the falls will come from the northern Victoria and southern New South Wales irrigation districts, with further falls in the northern drinking milk states,” Harvey says.

“However, there is now downside risk to this forecast given the impact of the bushfires. It is too early to put a number on the volume of milk lost. We know there are a number of production regions affected including East Gippsland, Northeast Victoria and central New South Wales… with farm operators having lost cattle, farm infrastructure and pasture and feed supply.

“There has also been logistical disruption with milking unable to take place due to loss of power and milk not collected by tankers due to road closure. For farms affected, it will take time and investment to recover.”

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