Australia's dairy industry - a major rival for New Zealand dairy exports - will take a further three years to recover from last year's drought, a study says.
Farmers are waiting for more attractive pricing and weather before rebuilding herds, says the report by producer body Australian Dairy Farmers and processor
association Dairy Australia.
The research shows more than 80 per cent of producers were affected by the drought.
Of those, 55 per cent have yet to return to pre-drought production levels.
Australian Dairy Farmers deputy chief executive and policy director Robert Poole said the drought cut milk output last year by 11 per cent, the biggest fall in 30 years.
Although 59 per cent of farmers planned to increase production in the next 12 months, the total milk volume was expected to rise by a maximum of only 2 per cent as farmers remained cautious about investing until they saw evidence of rising prices.
With the national herd having shrunk by 8 per cent since 2001-02, milk production was not expected to be back to pre-drought levels of 11.4 billion litres until 2006-07.
"It was a massive event for us, probably something the dairy industry has never seen before in the effect that it had across such a large number of regions," Poole said.
But while 46 per cent of dairy farmers felt negative about the future of the industry, the industry had the capacity to recover, he said. "The industry has held its ground. It looks like the decline in milk production is coming to an end."
- NZPA
