Australia’s Bushfire Crisis – Implications For Dairy Product Availability

The devastating impacts of the extended drought and challenging milk prices have seen dairy producers walk away from the sector in unprecedented numbers over the past few years. In addition, this summer’s disastrous bushfire season is impacting the entire South-Eastern seaboard of Australia, and is another walloping for Australia’s besieged dairy sector.

 

 

Last September, just prior to the start of this extended bushfire season, we talked about the drastic plight for many of Australia’s dairy producers as a consequence of years of drought, issues with access to affordable irrigation water and domestic and global pricing and trade volatility, all of which have seen dairy farm numbers reduce from 7,500 in 2010 to 5,700 in 2018.

With the 2019/20 bushfire season still likely to persist for several more months, there are already worrying short and long-term indications of the dire impact this will have on the viability of dairy farms and the availability of dairy produce from Australia.

Since late Autumn there have been media reports from Southern Queensland to Southern New South Wales covering the immediate impacts of the bushfires on individual dairy producers – deaths of livestock directly from fires, further mortality as a consequence of lack of feed, reduced production because of lack of feed and farmers having to dispose of raw milk because of the impact of the fires on transport availability and the power infrastructure required to refrigerate milk.

Thankfully, in the immediate aftermath, many dairy processors chose to honour payment commitments at various levels (despite being unable to receive milk from some farms), to try and ensure the immediate financial viability of farmers. Governments – both State and Federal – are implementing emergency payment schemes to assist fire affected farmers.

However, as the fire season draws to a close, the discussion will turn to the long-term effects on dairy farm viability. The costs of re-establishing pasture, replacing lost stock, rebuilding breeding and genetic capability, and repairing or replacing damaged dairy infrastructure, is likely to continuously impact the vulnerable sector in the near future.

 

 

While the large supermarkets recently claimed that the extensive bushfires haven’t yet impacted on milk availability, this is likely to change in coming months. And the reality is that, while fresh milk supplies may remain a priority, secondary priorities for milk used in the manufacture of cheese and other dairy products probably has been impacted.

 

 

Furthermore, Government support is needed beyond emergency payments. Without interventions such as drought and bushfire recovery and low interest loans to support primary producers and manufacturers recover from the impacts of this dreadful summer, the likelihood is that there will be further exits from the dairy sector, impacting Australia’s long-term dairy production capacity.