The NSW Department of Primary Industries (DPI) has released its latest figures on how the dairy industry is travelling and, after some really tough years, dairy farmers are back in the black.
It has been a miserable period marked by drought, floods, fires and the supermarket price wars that saw milk sold for just $1/litre, but things are looking up for the state’s 523 dairy farmers.
Profit is up
A survey of dairy farmers conducted by the DPI showed that the 2020-21 financial year was the best in 10 years.
DPI’s dairy development officer Sheena Carter said the most recent survey of 41 dairy farmers was the best they had ever seen.
“The average operating profit was $471,437 or $2.07/kgMS [Milk Solids] for the 2020-21 financial year,” she said.
“It was just over $269,000 in the 2019-20 financial year.
“So it’s up nearly 75 per cent on what it was in the previous year.”
Ms Carter said the average net farm income had also increased exponentially.
“Average net farm income is the operating profit and then we take out interest and lease costs for the business,” she said.
“That increased from around $163,000 up to about $370,000 on average across the data set.”
‘Incredible’ year for young dairy family
Brodie Game runs 300 cows on two South Coast properties she leases with her husband, Kevin.
They started from scratch nine years ago with just two cows and almost gave up during the peak of the drought.
“We were wondering how many cows we could sell to keep going, before we couldn’t keep going because we didn’t have enough cows left,” Ms Game said.
Things have certainly turned, however.
She said this year had been “incredible” and they had been “cutting silage like crazy” to store feed ahead of the next dry season.
“It’s been amazing and it’s really widespread. It hasn’t just been a few good farmers who’ve seen it,” she said.
Farmers are spending up big as well.
“There are new dairies going in, new pivots, there’s certainly an increase in confidence in farmers,” Ms Game said.
Ms Game said they had used this year’s income to pay off debt.
“Not having those debts … will make a massive difference to us, not having to worry about that,” she said.
Ms Carter said the industry was going well thanks to good terms of trade.
“We’ve got stable, strong milk prices at the moment, which is reflective of processors still trying to make sure they’ve got milk supply,” she said.
Farmers were also making money from selling livestock and some costs for concentrates, hay or silage fell 18 per cent.
“Farmers can grow much more of their home-grown feed now [they’re out of drought],” Ms Carter said.
Floods take their toll
Not everyone has had a good year.
A one-in-100-year flood on the state’s Mid North Coast in March destroyed pastures, fences and infrastructure and swept away animals.
“The floods certainly did have an impact on a number of those businesses both financially and physically on farm and emotionally for those farmers as well,” Ms Carter said.
Confidence high for next year
Ms Carter said confidence was up and a number of businesses were buying land or upgrading equipment.
“All farmers either expect to see stable or improving profits, with no-one anticipating declining profits,” she said.
Farmers are worried about rising fertiliser prices, however, as well as climate change, labour shortages and the milk price.