Tasmania's current milk production is on track to exceed the state's annual production record of 913 million litres, which is good news for the sector as it, alongside Gippsland in Victoria, continues to supply the bulk of Australia's milk.
Dairy Tasmania executive officer Jonathan Price said the state's production levels were up 4.9 per cent in January.
"So July through to the end of January we produced 592.5 million litres of milk, which is 10 million litres up on the same time last year," Mr Price said.
"Depending on how the autumn conditions unfold we may exceed the previous state production record ... the early indications are that autumn could be quite favourable."
He added that the main input continued to be high grain prices.
The state's production levels however are in contrast to the rest of the industry, with Dairy Australia forecasting a drop in national milk production of between 3% and 5% to 8.3 to 8.5 billion litres for the full 2019/20 season.
Dairy Australia said the bulk of Australia's milk production was coming from Tasmania, as well as Gippland in Victoria, which is shoring up national milk production levels and offsetting challenges elsewhere.
This is allowing Tasmanian farmers to capitilise on favourable weather conditions and high farmgate prices, "where pressure on milk supplies within Australia has prompted some processors to announce farmgate price increases, despite the ongoing economic risks associated with Covid - 19".
Dairy Australia insights and analysis manager John Droppert said good weather conditions were key for southern producers.
"A recent recovery in national milk production, together with substantially more favourable weather conditions across many dairy regions have been positive developments at a time of strong local and global dairy market fundamentals," he said.
"These have come amidst a tumultuous backdrop combining global disease with local drought and bushfires. Despite relatively stable supply and demand conditions, international trade faces the dual challenges of the ongoing African Swine Fever outbreak, and still-escalating Covid-19 crisis."
As Covid-19 continues to create issues for various sectors, dairy farmers particularly in southern Australia remain currently shielded from the impacts, as supply and demand of dairy products "is yet to be materially impacted".
Mr Price said Dairy Tasmania would continue to monitor Covid-19 impacts daily, and take necessary steps according to the best information available.
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