Dairy farmers happy to milk profits but hurdles remain
High farmgate prices are driving positivity in the dairy industry but not all farmers share the optimism.
High milk prices are fuelling the optimism of many dairy farmers but not everyone shares the positivity.
A national survey of dairy farmers shows 86 per cent expect to turn a profit this season.
The survey of 700 farmers also showed 84 per cent were feeling positive about their businesses. Almost all respondents were farmers from family enterprises.
Australia's largest dairy co-operative Norco has announced farmers will get an increase of 1.1 cents per litre from Thursday.
The lift takes the average price per litre to 88 cents, a farmgate record for Norco farmers.
But not all farmers are celebrating.
Queensland and northern NSW farmers were caught off guard when dairy company Lactalis announced a milk price drop of five cents a litre.
Lactalis told AAP exhaustive research went into its milk price offering, with consideration given to the impact on farmers and consumers.
Southern NSW dairy farmer Malcolm Holm said the positive national outlook did not reflect what was happening in his region.
"Margins are still pretty tight and we've still got a shrinking milk pool and farmers leaving the industry," Mr Holm said.
"About 80 per cent of our dairy farmers had flooding impacts last year.
"Even though we've had really high milk prices, we've also had some pretty high input costs as well."
Farmers are still battling a shortage of labour with 60 per cent of survey respondents reporting difficulties finding employees, with a quarter severely impacted.
Dairy Australia's Eliza Redfern expects milk prices to remain high.
"Our forecast for milk prices for the upcoming season is that they will remain above average because of that competition for milk amongst processes," she said.
"Falling export commodity prices are impacting dairy processor returns and incentivising imports, but a tight milk pool ensures the need for supply is strong."