May 2010 edition
Dairy Industry Farm Monitor Project gears up for 2010
Daniel Gilmour, Farm Business Economist, Victorian Department of Primary Industries
The Dairy Industry Farm Monitor Project for 2009-10 financial year will commence soon, with data collection beginning with participating farms in June. The report will be publicly available online on July 31 and available in hard copy on August 31.
Over the past three years the project has analysed and discussed 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 productivity and profitability. In 2009-10 the project will analyse 75 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.
Despite this over 80 per cent of participant farmers’ recorded positive earnings before interest and tax (EBIT) in 2008/09 although this was a reduction from 95 per cent in 2007-08. Average EBIT 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.
As well as analysing farm financials, the project also analyses a number of physical measures. The more profitable farms did not necessarily have larger farm size 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, both grazed and conserved, in their diet; or
- had lower input costs, both variable and overhead.
The whole farm analysis showed that on average, farms in the south west ran the largest herds (384 cows) over the largest area (328 hectares). Gippsland had much smaller average useable area compared to the other two regions at 172 hectares, but sold the highest kilograms of milk solids per hectare at 803 kg MS/ha, compared to 649kg MS/ha in the south west and 784kg MS/ha in the north. Cows in the north produced a slightly higher percentage of milk solids at 4.3 per cent fat and 3.4 per cent protein compared to 4.2 per cent fat and 3.4 per cent protein in the South West and Gippsland.
The Dairy Industry Farm Monitor Project is an initiative of the Department of Primary Industries Victoria and Dairy Australia. It provides industry and government with current economic, social and environmental data that will enable Victoria’s dairy industry to monitor changes in productivity and profitability over time.
To view previous editions of the report including business and production performance of farms in the project go to www.dpi.vic.gov.au/dairyfarmmonitor. For further information contact Daniel Gilmour on (03) 5430 4395.
