WA’s dairy industry continues to face tough conditions including falling production volume and falling demand

WA’s dairy industry is facing dire times with its milk production falling 3.7 per cent last financial year due to tough seasonal conditions, feed shortages and stagnant farmgate prices however, farmers remain hopeful they can ride out the wave. Milk production was down a total 331.2 million litres in the 2024-25 financial year and has continued to fall in July by another 7.9 per cent. A late-break north of Bunbury and feed shortages across the State contributed to the volume reduction however, WAFarmers Dairy Council president Ian Noakes said the blame can also be pointed at stagnant farmgate prices which has resulted in some farmers reducing herd sizes or leaving the industry altogether. “It is more than I would have anticipated, definitely, but I’m not surprised that it was down — it’s just a symptom of where we’re at as an industry,” he said. “The profitability is not there because the milk price is not high enough.” Mr Noakes said the main concern for industry was that there was no system in place to protect farmers financially when they do have a tough season. “We’ve been asking for more stable stability in the industry than that, and that means when things are tough, farmers need to be paid more,” he said. “If other products get in short supply in a supermarket, the price goes up, but for milk, we get the same price every day of the year.” WA was not the only state to record a fall, with numbers actually in line with national statistics which were released in Rabobank’s latest dairy outlook report, Quarter 3 Global Dairy Quarterly. RaboResearch division forecasted an 1.7 per cent decline in Australian milk production for the full 2025-26 season, to reach 8.05 billion litres. The forecast was almost 100 million litres lower than last’s months Dairy Australia prediction of 8.149 billion litres. RaboResearch senior dairy analyst Michael Harvey said this decline had reflected drought conditions and feed shortages, which had dragged on milk production, particularly across the south-east corner of the country. “This included the western districts of Victoria, where production dropped more than five per cent,” he said. “Unfavourable conditions also dragged production lower in eastern Victoria and Tasmania.” The report said overall July milk production in Australia was down four per cent to start the 2025-26 season, which commenced on July 1. In more positive news, Mr Harvey said there had been good rainfall in July for many key dairy regions in Australia, helping to ease rainfall deficiencies in drought-impacted areas. “However, soil moisture is still an issue with more rainfall needed and feed shortages are expected to persist,” he said. “Positively, though, above-average rainfall is forecast by the Bureau of Meteorology across many regions over the next three months.” The report noted Australian farmgate milk prices for the 2025-26 season are locked in at higher levels than the previous season however, this was not the case for WA farmers. While also not of significant interest to WA farmers given the State’s reliance on the domestic market but important nonetheless, dairy exports had a “solid” season in 2024-25. Exports rose 1.5 per cent in volume terms year-on-year and 12 per cent in value terms. Looking to the domestic market, “retail prices continue to edge higher again following two previous quarters of deflation across local dairy aisles,” Mr Harvey said. However, in terms of local demand, Australian consumption of drinking milk was shown to have fallen by 1.8 per cent to total 2.34 billion litres in the 2024-25 season.