WestVic Dairy News - August 2010 Edition
Report monitors dairy farm performance
By Daniel Gilmour & Claire Swann, Farm Business Economist, Department of Primary Industries
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 73 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.
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 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 the 2009-10 shows that on average, farms in the South West ran the largest herds with 366 cows over the largest area of 302 hectares. Whilst Gippsland farms were on average the smallest with a useable area of 172 hectares they consumed the highest amount of dry matter per hectare at 7.6 tonnes. Interestingly the farms in the North produced both the highest amount of milk solids per hectare at 806 kilograms and per cow with 505 kilograms.
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 on (03) 5430 4395.
