Dairy income hits record low
GEMMA ROWLEY firstname.lastname@example.org
DAIRY farmer income has hit an all-time low. The Dairy Farm Monitor Project annual report 2018-2019 reveals dairy farmer income is the lowest it has been since the monitoring project commenced 13 years ago. The Dairy Farm Monitor Project provides a comprehensive physical and financial analysis for farms across Australia and is a joint initiative between Agriculture Victoria and Dairy Australia. The dry and challenging season faced by northern Victorian farmers was reflected in the report. While average earnings, before interest and tax was $85,000 across the state, northern farmers experienced severe losses, with net farm income falling to $85,000 in the red. Findings were concluded after analysing 25 different northern Victoria dairy farms during the 13-year project. However, 10 of the 25 farms analysed, recorded positive earnings before interest and tax. While northern Victorian farmers were hit the hardest for making a profitable income, Agriculture Victoria’s Farm Business Economist Claire Waterman said there was a significant variation in profitability across the three dairy regions of Victoria. “The dry conditions have led to a 20 per cent increase in variable costs as a result of higher irrigation water, concentrates and fodder prices,” Ms Waterman said. “Farmers also spent more on making homegrown feed, including fertiliser, hay and silage making costs. “The project reported average earnings, before interest and tax, were $85,000 in 2018-19, down half of the level set the year before.” For Victoria’s north, the report also showed that approximately 1130 dairy farms in northern Victoria produced 1.69 billion litres of milk in 2018-19, accounting for 30 per cent of Victoria’s milk production. However, the report also found that the substantial increase in feed costs, including irrigation water was only partially offset by the seven per cent improvement in milk price. Despite the increased costs and earlier culling, herd size among the farmers surveyed remained constant at an average of 357 cows. At the time of being analysed, farmers reported that they expected an improvement for 2019-2020. “Following a challenging 2018-19 season, more than 85 per cent of farmers predicted their farm profit will improve for 2019-20, underpinned by strong expectations for improved milk price and stable or improving milk production,” Ms Waterman said.