South Australia milk output plunges amid prolonged dry spell

AUSTRALIA – South Australia’s dairy sector is facing the prospect of a third consecutive year of drought, placing further pressure on already declining milk production.

According to the latest figures from Dairy Australia, the state’s milk output fell 6.5% year-to-date and is down 10% compared with February 2024, making South Australia one of the hardest-hit dairy regions in the country.

South Australian Dairy Association President Robert Brokenshire said prolonged dry conditions are forcing producers to reduce herd sizes, sell young stock and, in some cases, leave the industry altogether. He warned that even if seasonal conditions improve, rebuilding dairy herds and restoring milk production could take at least two years.

At the same time, farmers are being squeezed by sharply rising input costs. Urea fertiliser prices have climbed from US$632.7 (A$900) to US$948.92 (A$1,350) per tonne, while booster fertilisers are now selling for between US$949 (A$1,350) and US$1,015 (A$1,450) per tonne.

Higher diesel and petrol costs are adding further strain across the entire dairy supply chain, from feed transport to milk collection.

Brokenshire said farmers will need processors to deliver the strongest possible milk price in the coming season if dairy businesses are to remain viable.

However, he acknowledged that processors themselves are facing rising costs. He also called on the federal government to convene an agricultural summit focused on food security, fuel access and the long-term future of Australia’s farming industries.

Dairy Australia analyst Tom Youl said better conditions in spring and early summer 2025 temporarily supported production, but they were not enough to offset the earlier decline in herd numbers caused by drought.

With forecasts pointing to below-average rainfall through much of the year and continued disruptions to fuel and fertiliser markets linked to the Middle East conflict, pressure on South Australia’s dairy sector is expected to continue in the near term.

The report comes as Australian dairy farmers increasingly adopt practical methane-reduction tools amid pressure to lower livestock emissions while maintaining profitability.

Rather than waiting for future technologies, the industry is focusing on feed additives and farm management systems that can be integrated into existing dairy operations with minimal disruption.

Feed additives have emerged as the leading solution. Products based on red seaweed, essential oils and synthetic compounds such as 3-NOP are being used to reduce methane produced during digestion.

Research in Australia has shown these technologies can cut methane emissions by anywhere from 25% to more than 90%, depending on the additive, feeding system and ration used.

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