But Dairy Australia’s outlook shows nationally, milk production will be two per cent higher for the 2014-15 season than 2013-14.
Dairy Australia analyst John Droppert said farmers benefitted last year from higher global prices, the lower Australian dollar and a fall in the oil price.
But grain prices have stayed high as have other input costs.
«We’ve seen some really strong growth over the first half of the 2014-15 season, but that’s starting to slow down as summer has kicked in and rainfall have put the breaks on pasture growth,» Mr Droppert said.
Overall for 2014-15 Dairy Australia is forecasting a total production of 9.4 billion litres, similar to three years ago.
Mr Droppert said milk production was «fairly stable».
«There’s some growth but nothing out of the box,» he said.
The report said the stronger international dairy prices through the previous year prompted enormous expansion, and it brought the market undone and prices fell.
Western Australia’s production was showing strong growth, but there was contraction in Queensland.
Those are domestic focussed states, and the Dairy Australia report finds the cheap $1 per litre milk is still gaining traction in the market.
«The branded milk share of fresh milk slipped 1.4 per cent in favour of private label milk [supermarkets] which is now 48.4 per cent of the total milk market,» Mr Droppert said.
There’s been concern in the dairy industry that processors needed to consolidate, and Dairy Australia reports that has occured in Victoria.
«At the end of 2014, Parmalat followed on from its acquisition of WA-based Harvey Fresh by buying Longwarry Food Park (LFP). Parmalat announced that it had acquired Gippsland-based LFP, subject to conditions,» the Dairy Australia report stated.
«The AUD $67 million deal for LFP gives Parmalat some additional milk supply and a manufacturing facility in Victoria with bolt-on export capabilities in ingredients including milk powder (WMP), cream cheese, as well as fresh and UHT products.»
Source: ABC
