August 2010 edition
Report monitors dairy farm performance
Daniel Gilmour and Claire Swann, DPI Farm Business Economics
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.
This year the annual report, released online on 30 July, is the forth consecutive year of the report. 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 71 dairy farm businesses across the state.
In 2008-09 the project results reflected the 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 price, 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.
Data collected for the 2009-10 Dairy Industry Farm Monitor Project report shows that on average, cows in the North had the highest milk yields in terms of total milk solids produced both per head and per hectare with 515 kilograms and 806 kilograms per hectare respectively. The high reliance on bought in feed for farms in the North was highlighted with results showing on average farms in the north brought in 49 per cent of energy consumed on farm compared to 29 per cent and 27 per cent in the south west and Gippsland respectively.
In the northern dairying region data is collected from farms located in the northern irrigation region and north east Victoria. Analysis of these sub-regions shows marked difference in their average farm performance. While those farms located in the north east had less milk production than the northern irrigation region (850 compared to 657 kg MS/ha) they had significantly less costs resulting in greater profitability. The average earning before interest and tax for the north east sub-region was $697/ha compared to minus $8 in the northern irrigation region. Some of the contributing factors to this difference was greater rainfall, lower costs and greater energy percent of pasture grazed in the diet.
The feature article, to be released online on September 30, will examine the influence 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 at DPI Epsom on (03) 5430 4395.
