The Australian Dairy Corporation has forecast a 1.5% drop in Australia’s milk production this financial year as a result of this year’s drought.

The ADC also warned that milk production for the rest of the 2002-03 year will be dependent on rainfall and the availability of feed grain during the next few months.

The drought is causing feed grain prices to rise and is adversely affecting pasture conditions. It is factors such as these, together with low returns, that are expected to slow milk production further in the second half, reported the Sydney Morning Herald.

Australian milk output in September was 1.1bn litres, down 1.6% compared with September of last year, bringing the total for the first three months of the fiscal year to 2.6bn litres, down 0.9% on the same period last year.