All dairy regions nationwide contributed to the 5.7 per cent overall decline to 8.795 billion litres, but the Goulburn Valley and Riverina registered the greatest falls, with a 50 per cent cut to usual output.
Lingering trade tensions between Washington and Beijing have flowed through to a softer global outlook, but Rabobank senior dairy analyst Michael Harvey said there was cause for optimism for 2020 prices.
“Despite all the noise about trade wars, we should take some comfort in global prices still being in good shape,” Mr Harvey told The Weekly Times.
Rabobank is still forecasting Australia’s milk production to decline in the 2019-20 season by about 3 per cent, led by further falls in output from the Southern Murray Darling Basin.
The report’s modelled annual average farmgate price was $6.65/kg milk solids for the 2019-20 season, based on a spot currency of US67 cents.
Rabobank also noted the end of the “dollar-a-litre’’ race between Coles and Woolworths, which started in January 2011, was having some flow-on effect to farmgate prices.