Dairy Australia senior analyst John Droppert is presenting the results of the organisation’s latest Situation and Outlook report at Dairy Plains and Smithton on Thursday for DairyTas.

He will share the key themes from the report, compiled from a survey of 1000 dairy farmers in February, on a national and state level.

“Confidence is down,” Mr Droppert said.

“There is a huge correlation between the milk price and confidence, but we’ve seen a new aspect this year, and that is around trust. Trust has never been pulled out before, but the in last 18 months it has become important,” he said.

Dairy farmers are unsure of what to expect in the future after losses in past seasons and so are waiting to see what happens in the industry before making any big decisions, Mr Droppert said.

“It depends on the action [of milk processors] going forward. Farmers are looking for a demonstration of that,” he said.

Drilling down to the statistics, Mr Droppert said 30 per cent of Tasmanian dairy farmers were in a “wait and see” position right now, but more than 95 per cent of the state’s farmers were expecting more favourable conditions in the next three years and 70 per cent expected to grow their businesses in that time.

“There is a strong reference point for growing herd size and milk production [in the future],” Mr Droppert said.

Sentiment may be positive for the future, but dairy farmers are still unsure about the best response to the sector’s situation now.

“If you look at Tasmanian in 2016, before the step downs, 34 per cent [of dairy farmers] were looking at expansion, but that dropped to only 20 per cent this year,” Mr Droppert said.

“Quite a lot of farmers have put a hold on things because cash flow is tighter and confidence is down,” he said.

Mr Droppert also said dairy farmers were asking if the current dairy situation was how things would stay on the back of their recent lean years.

“They’re wondering if this is the new normal because we’ve had a couple of years of low prices, so people are wondering if it will improve,” he said.

Farmers are watching how milk processors respond and what is happening within the broader dairy market to help with decision making.

“Globally dairy markets are in relatively neutral territory with sufficient demand to absorb northern hemisphere spring production without major price disruption,” Mr Droppert said.