Dairy Australia released its December Situation & Outlook report which contains an unchanged outlook for milk production this season but says the national output will end at the lower end of the forecast range of 1% to 3% growth this season. In the four months to October, production was up 1.6% and there are steep comparatives to beat in the second half of the season. The baseline forecast assumes the national dairy herd will continue to stabilise in 2020/21 but still end the season down 0.6% compared to last, largely because of ongoing farm exits and associated culling.

Farm exits remain a significant challenge in Victoria, where DA’s preliminary data suggests around 11% of dairy farmers chose not to renew their licence for the 2020/21 season, a significant increase compared to the long-term trend (4%), and higher than the rate of exits in 2018/19.