Tasmanian Farmers and Graziers Association dairy council chairman Andrew Lester said increased grain prices had taken the edge off the improved farmgate milk prices.
New industry player Saputo will pay farmers $5.75 per kilogram of milk solids for the new season, while the state’s largest processor Fonterra is opening the season with $5.85kg/MS.
Mr Lester said grain prices had jumped from about $250 a tonne at harvest to about $400 delivered to farm.
Depending on a farming system each cow could consume a tonne of grain a year.
“It’s a significant amount of money and impacts on profits,” Mr Lester said.
“The improved milk prices help offset some of the increased input costs.”
Mr Lester said hay prices had increased slightly, but Tasmanian farmers had not been as badly affected as their interstate colleagues.
“The drought in Victoria and other interstate dairy regions has really hit input costs. Hay has gone up extremely high in some of those areas.”
Demand for fodder is strong particularly in the state’s North-West dairying region with limited amounts of lucerne around for sale.
“Fertiliser costs in Tasmania are on an even keel, but labour costs also continue to rise,” Mr Lester said.
He said there was optimism about milk prices among Tasmanian farmers.
DairyTas executive officer Jonathan Price said overall the farmer response to the opening milk prices was “relatively positive”.
“However, increased input costs do effect profit, hay has increased in price, possibly because of the impact of army worm through summer,” Mr Price said.
In May, Tasmania’s milk production was 23 per cent up at 76.3 million litres compared to May 2017 with 62 million litres.
“We had mild weather with good early autumn rain in the main dairy regions, the large percentage increase is also a reflection on how poor last autumn was,” Mr Price said.
Tasmania’s total milk production for period from July 2017 to May 2018 was 863.5 million litres compared to 792 million litres the same time the previous year.
“Year to date we are already trading 9 per cent above last year,” Mr Price said.
By: ROGER HANSON
Source: Tasmanian Country