A senior dairy analyst has backed his claim he’s “cautiously optimistic”, about the coming season.
Dairy Australia analyst John Droppert was speaking at the corporation’s annual Situation and Outlook breakfast, in Melbourne.
Fresh Agenda’s Steve Spencer asked how robust the production outlook was for upcoming season, given the latest price announcements and farmer confidence.
Mr Droppert said it was too soon to determine the outlook, after recent opening price announcements.
“I think people’s heads are still spinning, as to what has been announced, what is yet to be announced, whether there is money in the couch, or the pocket, or what dynamics are going on here,” Mr Droppert said.
“Until we start to see the rest of these announcements play out, and the responses to them, I think a modest increase is still where I am happy to be.
“We still have cheaper feed and cheaper grain, and so far, good season – but I don’t think there’s going to be anyone out there dancing in the streets, and buying new Range Rovers, or talking about how much money they are making.
“There are signs cautious optimism is the way to go, the question is just how cautious we are, on that.”
Australian Dairy Farmers acting chairman Terry Richardson said a third of Victorian farmers, as well as some Tasmanian and South Australian producers, not being able to cover the cost of production was a “serious threat.”
“There are some serious decisions to be made,” Mr Richardson said.
“I think there are some strategic issues, also, the industry will have to consider, as the season unfolds.”
Fonterra’s managing director Rene Dedoncker said the vast majority of farmers were quite positive about increased production.
“Some would say two or three per cent is quite conservative, others are in that zone,” Mr Dedoncker.
In the majority of cases, those prepared to invest, would reap rewards.
“We are confident, but again, time will tell – we need the industry to take a multi-year view
“I know we need to get profit back on farm, and that will be challenging for some, but if you look at what is happening, and take a view of what is happening over two and three years, it does hopefully set a threshold, a barrier we don’t fall back through.”
Fonterra’s perspective was the season ahead was looking quite good.
