MOUNT Compass, SA, dairy manager Jake Connor, Nangkita Dairies, says the recent farmgate milk price rise, and strong demand for milk, has brought a lot of confidence back into the dairy industry.
"The demand for milk is real and that's going to force stronger milk prices in the next five to eight years than we've seen in the (recent) past, because that demand is not going away," he said.
But Mr Connor, who supplies La Casa del Formaggio, said many farmers found a large percentage of the improved price was lost to rising input costs, including feed and electricity.
"That's taken some of the positivity out of the high milk prices," he said.
Mr Connor attended the SA Dairy Summit and said the number of producers and processors gave him confidence.
"As a young person, trying to stay positive about the industry, I want to support any way the industry can move forward and make it more stable and secure," he said. "It really feels like there might be some change happening."
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He wanted to see improved communication between producers and processors to rebuild trust and confidence.
"There has to be change - the milk pool can't drop much lower or we are in trouble," he said.
"The harder one to address is the issue of input costs going up every year."
He said grain had gone up 40pc in the past 18 months while fodder had essentially doubled in price.
"We need to be able to build a robust business model that can deal with spikes in the feed price," he said.
Mr Connor said the number of smaller, niche processors, such as cheesemakers, emerging throughout SA and seeking local milk were also a positive sign.
"That seems to be a growing trend, particularly in dairy and is giving a good image to dairy, and they all need milk," he said.
He said this competition, and desire for quality supplies of milk, was helping the industry get closer to something it had been wanting for years - a regional milk price.
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