They’ve been hard hit by what’s described as a deep and persistent trough in international dairy markets causing processors to lower farmgate milk prices late in the season.
Farmer confidence measured by the National Dairy Farmer Survey, which questioned 1000 dairy farmers in February and March, showed a decline in numbers feeling positive from 74% to 67%.
There was a bigger drop in the southern New South Wales and Murray regions from 81% to 62%.
Early indications from a subsequent survey showed at least a 20% drop in confidence since.
And northern New South Wales, Queensland and Western Australian dairy farmers were on high alert for flow-on impacts of farmgate price cuts in southern Australia, despite fresh milk prices being stable, Dairy Australia senior analyst John Droppert said.
“They are sitting okay but they are looking nervously at the horizon, scanning for impacts.”
Most WA, NSW and sub-tropical dairy farmers interviewed for the national survey were confident profits would be the same or higher than the average of the previous five years.
Of those surveyed in WA, 65% said their profitability was higher in the past year compared to the five-year average, which was up from 55% last year.
In NSW dairying areas just over half made a bigger profit in the past year compared with the five-year average.
That number dropped to 40% in the sub-tropical dairying regions.
But between 80% and 90% of survey respondents across those two regions expected to make an operating profit this financial year, which was in stark contrast to their counterparts in the southern states where an average of 56% expected lower profits.
National milk production was expected to be down about 2% for the 2015-16 season with a further 2-5% fall expected in the new season, particularly in the southern states, as European and United States inventories built.
But Western Australian milk flows were up almost 7% in the season to March, meaning the state now had excess milk. Queensland and NSW also produced more milk after good rainfall.
Australian dairy exports to China were up 16% last year with infant formula volumes lifting by 37% and retail value by 45%.
