Gippsland - How Now Gippy Now - August 2010 Edition
Report monitors dairy farm performance
The financial and production performance of dairy farms across Victoria in 2009-10 has been analysed and results are now available via the annual Dairy Industry Farm Monitor Project report. The Dairy Industry Farm Monitor Project is a joint initiative between DPI and Dairy Australia and provides objective and independent data to the dairy industry, government and farmers.
Released online on 30 July, 2010 the fourth consecutive year of the report analyses and discusses the performance of dairy businesses across northern Victoria, Gippsland and south west dairy regions. In 2008-09 the project surveyed 68 farms and identified trends in profitability and productivity. In 2009-10 the project has analysed 72 dairy farm businesses across the state.
In 2008-09 the project results reflected a turbulent year for the dairy industry during which time global dairy prices fell significantly. On farm the drop in global dairy prices translated into a mid-season step-down in milk prices, the first since 1974. As a result the average earnings before interest and tax (EBIT) recorded across all participant farms was $1.08 per kilogram of milk solids sold or $796 per hectare. While still positive, this was a reduction of 55 per cent and 46 per cent respectively on profitability levels recorded in 2007-08.
In addition to analysing farm financials, the project analysed a number of physical measures. The more profitable businesses did not necessarily have larger farms or bigger herds, but they produced more milk, both per cow and per hectare; consumed more pasture per hectare; had a higher percentage of home grown feed in their diet, both grazed and conserved; and had lower input costs, both variable and overhead.
At the time of writing this article the 2009-10 Dairy Industry Farm Monitor Project report was being completed. Preliminary analysis of the data collected for 2009-10 shows that on average farms in Gippsland were smaller and ran fewer cows than those in both the south west and north of the state. However farms in Gippsland did graze the most pasture at 8.3 t DM/ha and consumed the greatest amount of home grown feed, as a percentage of ME consumed, at 75 percent.
A feature article, to be released online on September 30, will examine the influence that different calving patterns have on milk price received, cost of production and overall business profitability. Further information relating to this article will be available closer to the release date.
To view the full report including business and production performance of farms in the project for 2009-10 go to the project website at www.dpi.vic.gov.au/dairyfarmmonitor For more information contact Daniel Gilmour on (03) 5430 4395.
Written By Daniel Gilmour & Claire Swann, Farm Business Economics, Victorian Department of Primary Industries