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Dairy Farmers Adjust Strategies Amid Changing Milk Prices

Australia 25.06.2024
Source: The DairyNews
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Dairy farmers are currently reviewing their input costs and budgeting for the upcoming season in response to the prices offered by milk processors. There is optimism among some farmers for price increases during the first half of the year, particularly for spring flush milk. A notable trend is the focus on increasing production, especially of milk solids.
Dairy Farmers Adjust Strategies Amid Changing Milk Prices
Source: freepik.com
Milk processors are also evaluating their input costs and margins. Over the past two years, Inverloch dairy farmer Mick Hughes has fed high grain ratios due to the milk price offered by Saputo. "Normally we feed 800 to 1.2 tonnes of grain, because of the comparable grain to milk price return," he said. "We increased the amount of grain we bought and fed 1.8 tonnes per cow for this season. That milk price ratio will probably change because of what they’re offering next season. I expect our milk price to go lower, and then we’ll need to feed grain strategically."

Saputo Dairy Australia’s opening weighted average milk price for the 2024-25 season is $8 to $8.15 per kg MS, with a growth payment on milk solids of $0.70 per kg MS. This opening offer is a significant decrease from the average $9 per kg MS at the start of the 2023-24 season. Mick noted, "If we have a good season for grass growth and silage production, the milk price will be irrelevant."

Kellie Gardiner, a dairy farmer from Catani, works alongside her parents and sister on their three-generation family farm, which is still managed by her grandfather. This limits her ability to make decisions on increasing production. They milk once a day and supply Bulla Dairy Foods. "Bulla has offered us less than we’d like," Kellie said, noting that the company’s opening price ranges from $7.85 to $8.65 per kg MS, compared to last year’s $8.80 to $9.60 per kg MS.

To offset the lower price, Kellie has been buying extra cows to increase volume, both in total production and milk solids. She recently purchased in-calf Jersey and Holstein cows at a dispersal sale at Koonwarra VLE. Their herd consists of one-third Jersey cows, one-third Friesian cows, and one-third mixed breeds.

Shaun and Sharna Cope, new entrants to the dairy industry, recently purchased a dairy farm in Meeniyan and have been milking for Lactalis for the past few weeks. After sharefarming with Shaun’s parents and taking a break to raise and sell heifers, they started milking on June 7 with 22 in-milk Holsteins and purchased an additional 20 in-milk cows the next day. All cows are in-calf to sexed semen and due to dry off at the end of June to begin calving in late July.

Shaun and Sharna have also been buying springing heifers in-calf to sexed semen, including 19 Holsteins from a combined sale. "We had already bought enough heifers, so we were looking for cows to buy," Shaun explained. "The heifers have just started calving, so we’ll continue milking after we dry off the cows. We’ll push these heifers back next year to calve in July, so everything will be in sync."

Their decision on which milk processor to sign with for the 2024-25 season depends on the bonuses and incentives on offer. "We’re supplying milk to Lactalis in June and weighing up our options," Shaun said. "We want to know the price, but also what bonuses and incentives are on offer." They are particularly interested in incentives that support young farmers and new entrants to the dairy industry.
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