Milk, butter prices tipped to soar as floods, droughts squeeze beleaguered Aussie dairy farmers

News.com.au

2 days ago

Milk and butter prices are predicted to surge, with floods destroying dairy farms in NSW and the driest conditions on record crippling those in Victoria and South Australia.
Many NSW farmers are embarking on gruelling post-flood clean-up efforts, returning to their properties to find their cattle dead or missing, fences and infrastructure destroyed, and machinery submerged in flood waters that will likely need to be replaced.
Dams and paddocks are also dry in Victoria and South Australia, with fodder prices reaching nearly double their usual amount.
'I think the whole eastern seaboard is going to feel the shortage of milk and dairy products one way or the other,' EastAUSMilk president Joe Bradley told The Age.
'There's no ifs or buts … it's a disaster. Prices have to rise.'
EastAusmilk chief executive Eric Danzi warned this may be the first time many Australians see the devastation of the floods would be when they go to their local supermarket.
'There is going to be a real shortage of milk and products,' he told 2GB.
'How that plays through to consumers I don't know.
'Between the floods now, ex- Cyclone Alfred and the drought in South Australia as well as Victoria you're going to have a massive reduction in milk production across Australia.'
Leaders of the Australian dairy industry have called on governments to take immediate action.
'More than 40 per cent of Australia's dairy farmers are in drought, many of them battling the driest conditions on record, including in South Australia, South West Victoria, and extending into Gippsland, Northern Victoria and southern NSW,' a statement from industry body Australian Dairy Farmers said.
'Meanwhile, dairy farmers in NSW are cleaning up after a 1-in-500 year flood.
'We've issued an urgent plea to state and federal governments for meaningful support for dairy farmers.'
Among the requests is for the NSW government to roll out Category D and C disaster grants.
Currently, personal hardship assistance grants of $180 per individual or $900 per family are available, along with $1m community recovery grants for affected local councils.
NSW Nationals leader Dugald Saunders said that these are not going far enough to support flood-impacted residents.
'When you've got people who have lost literally everything – whether it's their home in town or their home out of town, and their hundred cattle or two hundred cattle, or all their fences or all of their fodder crops … 180 bucks or 900 bucks isn't going to help,' he told 2GB.
'Category D means everything is on the table. There are primary producer grants, there are small business grants, there are more household grants available, there are more council grants available.'
Over the past two weeks, a majority of Victoria received 20 per cent or less of the average typical rainfall expected in May, and the latest reporting from the Bureau of Meteorology indicated these conditions are likely to continue into June.
The Victorian Government on Friday announced it will deliver a new and expanded Drought Package due to the worsening conditions – supported by an additional $37.7 million in funding.
New analysis by the Treasury estimated that the immediate loss of economic activity from natural disasters so far in 2025 will be $2.2 billion.