This comes as Dairy Australia figures revealed Victorian milk production was down 11.9 per cent for the year to October, traditionally a peak production period, including a 20.2 per cent drop for October in northern Victoria.
Big milk processors have reported supplier losses and gains and are either tight-lipped or confident about the rest of the season, even though farmgate milk prices remain low.
The Weekly Times understands some still hunting for milk are struggling to find available dairy farmers, particularly in southwest Victoria, as many have signed supply contracts — including three-year arrangements with Warrnambool Cheese and Butter.
Rabobank dairy analyst Michael Harvey said there was an opportunity to make up production later in the season due to improved seasonal conditions, but huge losses in peak milk months will affect the entire industry.
Rabobank has forecast a 7 per cent decline for this season off the back of a 2 per cent decline last season.
“It will take production back to below nine billion litres (a year), a level not seen for 20 years,” Mr Harvey said.
He said most processors lost a lot of milk this season and would be trying to maintain throughput to reduce overheads and fulfil orders.
Cheese will form most of the orders, leaving little extra milk to be made into whole milk powder — the most improved commodity price-wise, Mr Harvey said.
Australian Consolidated Milk general manager Peter Jones said his company had done “a little bit of recruiting” but wouldn’t say how much.
It has recruited in the west and north Victoria and hopes to be at 300 million litres a year from next season.
Murray Goulburn, asked about the drop in milk volumes in Victoria and the impact on processing, said it “constantly reviews how to best optimise its plants”.
Fonterra Australia milk supply general manager Matt Watt said September production was down 10 per cent on a year earlier, but new supply has “somewhat offset the fall in production”.
Source: WeeklyTimes
Link: http://www.weeklytimesnow.com.au/agribusiness/dairy/milk-processors-scramble-to-secure-dairy-farm-suppliers/news-story/c0c362d2f43ef7fcbb3c9fc1dc14590a