The latest economic report by the Australian Bureau of Agriculture and Resource Economics and Sciences forecast the weighted average farmgate milk price would fall to 42c a litre in 2016-17.
Tasmanian Farmers and Graziers Association dairy council chairman Andrew Lester said it showed volatility still existed in the market.
“We are not out of trouble yet despite some upsides in recent commodity trade, but this report reminds dairy farmers we still need to vigilant with budgets and be mindful of the market conditions,” Mr Lester said.
Dairy farmers have already been left short-changed after major processors Murray Goulburn and Fonterra dropped the price paid for milk solids — and applied the price cuts retrospectively.
Fonterra, slashed its opening price to $4.73, but MG earlier this month said it would lift its farmgate milk price by 15 cents a kilogram of milk solids to $4.31 to $4.46/kg MS.
There are about 430 dairy farms in Tasmania producing about nine per cent of the nation’s milk production.
ABARES also forecast global prices to decline this financial year because of increased European Union production, with whole milk powder and skim milk powder expected to decline 1 per cent and butter and cheese by 2 per cent.
Australian Dairy Farmers president David Basham said the report painted a more gloomy picture than was warranted. He said: “In terms of the global dairy trade, the last three auction events have seen positive lifts.”
Mr Basham said while the world situation was “not something to celebrate,” it was more optimistic than the ABARES report suggested.
Source: TheMercury
Link: http://www.themercury.com.au/news/tasmania/tasmanian-farmers-face-new-hit-on-milk-prices/news-story/9ca470b4ba86f9daf763f406512ea8cd