Opening milk solid prices anxiously awaited by dairy farmers

Ventnor dairy farmers Adam and Annette Eldridge sell exclusively to Saputo and this year are hoping for above $9 a kilogram milk solids.

"I'm guessing it'll be similar to last year ($8.80/kg MS) to be honest," Mr Eldridge said.

"I just think the milk supply is too short in Australia and I don't think they can pull it back too much, if at all.

"[We're hoping for] around $9/kg MS, with a 15 cents/kg MS difference.

"There's just so many people that want out of milk at the moment and I think if they try and pull it back again, they're gonna lose more farmers."

The Eldridge family pulled back herd numbers in last year's difficult season, but have now recovered with their herd back up to 180 cows.

"The difference with this year is the seasons look really good, we've had a half-decent autumn and we've got feed ahead of us," he said.

"We're feeding half the amount of grain as we were last year and urea is half the price it was last year, so we can afford to feed the paddocks to feed the cows."

Caldermeade Farm dairy manager Mark Coutts, Caldermeade, who produces about 2.4 million litres of Jersey milk a year, agrees $9/kg MS is this year's bottom line.

"But for the farmers to make a return on their investments after all their costs then $10/kg MS is a far more viable option," he said.

"I think on world markets, there seems to be a positive trend on prices, so I'd be very surprised if prices aren't at the same level of this season, and if they're not, we'll see a lot more pressure put on the dairy farming community and we'll see more dairy farmers pulling out of the industry."

United Dairyfarmers of Victoria president and Larpent dairy farmer Mark Billing said Victorian farmers had a reasonable expectation that this year's milk prices should be sustainable for farmgates.

"We need to be looking at a minimum of $9.50/kg MS for sustainable milk production," Mr Billing said.

Anything below this, he said, would have a detrimental effect on the milk pool and for farmers to realistically combat increasing on-farm overheads, prices needed to be similar to, or above, this season.

"Grain and fertiliser prices have softened a bit which is good but all our other costs, and even some of the local government budgets that are out at the moment are talking about rural rate increases which are pretty significant, on top of everything else," he said.

"I'd hope they'd invest in the supply chain and keep in mind costs dairy farmers are still facing.

"I think season wise, at the moment it's looking reasonably favourable and that West Gippsland area has had a pretty good start to the season.

"The south-west hasn't been too bad and in the north it's been pretty dry as a lot of northern irrigators have gone late into the season.

"Seasonally it's not looking too bad but large availability and business pressures at the farmgate are taking their toll."

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Noorat dairy farmer Luke Heffernan is also hopeful for a price between $9-$10/kg MS, and believed once the first milk processor price was announced the rest would quickly follow.

"I think milk processors are just holding off a bit right now, and once someone starts, I think they'll all be pretty active again," Mr Heffernan said.

"In the end, we are just farmers, and our work on the farm is all we can do to just make the most of the seasonal conditions.

"We can't really do much about the quiet at the moment compared to last year.

"I guess if we get a good milk price, it's a bonus for our work.

"We had a pretty mild summer here, and the autumn has been good too with some good rain."

Meanwhile a leading Australian dairy market analyst has forecast local milk production will continue to slide next season.

Freshagenda tipped production would slide 3-5 per cent in 2023-24 on top of a forecast 6pc fall for the full 2022-23 season.

Opening milk prices are typically announced in late May to June.