Expensive water threatens Australian milk production

Published 26 November 15

The price of purchasing water in northern Victoria in Australia could result in dairy businesses becoming unviable. The price of purchasing water this year has increased to AUD$300 per million litres, up from AUD$120 per million litres in November 2014, leaving farmers with a choice between purchasing expensive water to irrigate or buy in expensive hay/grain. There is a belief that this could force some producers to exit the industry, if the situation persists.

Overall rainfall in much of Victoria (which accounts for 66% of Australia’s national milk production) between August and October of this year was very much below average. This coincided with October milk production for Victoria seeing a decrease of 1.8% compared to October 2014. However, concerns have been raised recently of the presence of a green drought, ie insufficient rainfall to grow crops on farms that have had a reasonable season to date, while, some farmers have seen production decline a month earlier than normal.