South-west dairy farmers' fortunes rise after milk price crisis

In May 2016 Fonterra Australia cut its farm gate milk price from $5.60 per kilogram of milk solids to $5 for the 2015-16 season.

But because it had already paid its suppliers the higher rate for 10 months, it had to claw back the money somehow.

For Ms Brown and her husband Rodney, it meant they would only get $1.91 per kilogram for the following two months.

"That was it, we knew we couldn't keep going," she said.

At the time, Ms Brown wasn't alone. The 2016 milk price crash triggered a mass exodus from the dairy industry, with many farmers culling herds and selling their farms.

"We were on a share agreement 50-50 with Rodney's parents. We sold our share of the cows and an out paddock and had to find other work," Ms Brown said.

"It had been a crap couple of years before that, so we were already in debt and just couldn't ride it out."

Ms Brown found work at a local milk bar while her husband got a job on a larger dairy farm.

"It was hard, but we had no choice," she said.

After six months in their new jobs, the Browns decided they wanted to stay in the industry, no matter how difficult it might be to make ends meet.

"We knew if we were going to make it work we would have to totally commit," Ms Brown said.

IN OTHER NEWS:

They approached Mr Brown's parents about returning to the farm but not 50-50.

"The only way to make it viable was to take over the whole business and Rodney's parents were ready to retire," Ms Brown said.

"We lease-purchased the cows and leased the farm from them. We were very lucky because we weren't in a position to buy a farm."

In 2017 the farm gate price for milk was better than it had been at the peak of the dairy crisis but it was still too low for many farmers to get by.

"I don't think we made a profit that first year," Ms Brown said.

"We really had to prioritise and spend our money carefully.

"Previously we had bought a lot of grain, which was expensive. Instead we decided to fertilise more, which yielded some great quality grass and silage."

Ms Brown said before their forced hiatus she and her husband would feed the cows whatever food was available.

"If we had silage we would feed the cows silage until it was gone. The problem was we were then at the mercy of the conditions. The grass might not be ready, but the cows needed to eat, so we would have to put them on pastures that weren't ready, which is a huge waste" she said.

"Now we always keep plenty of silage in reserve."

The new, rigorous approach to feeding their cows was just one of a suite of changes the Browns made as they transformed their farming practice.

"I started doing strict accounting, running cashflow every month to keep track of what we were spending and where, but also whether it was making us money," she said

"We also tightened our calving pattern, bringing it down to seven weeks and trying to get it in line with peak pasture."

Ms Brown explained it was important to try to get cows calving at a similar time so peak lactation in the cows could coincide with the best grass conditions.

"If you can hit peak grass at the same time as peak lactation, that makes for very cheap milk and great profit margins." She said if they hadn't changed the way they were farming, there was no way they would still be in the industry.

"Six years ago we were just ticking along, going through the motions. In a good year that can get you by, but not in a tight year," she said.

"You don't just wake up one morning and suddenly there's grass in the paddock and you're making piles of money."

But the many changes didn't just happen randomly.

It was Fonterra, the same company whose price change brought the Browns to their knees, that helped show them how to run a tight ship as dairy farmers.

Fonterra run a program called Farm Source, which gives its suppliers access to local teams of consultants, experts in everything from agronomy to land management to cow nutrition and accounting.

"They would come to the farm, look over the cows and the paddocks, chat everything through, see what needs to be done and then give us advice," Ms Brown said.

It is a free service for Fonterra suppliers. Ms Brown said to get the same service independently could cost her $50,000 a year.

"I guess from their perspective if our business is efficient and profitable, then the milk supply will look after itself. Everybody wins," she said.

Not only did this more scientific approach help the Browns get through the lean early days out on their own, it has also helped them invest more wisely during the good times.

"If I think to myself, 'should I buy that excavator?' I can look over all the data I have and make an informed decision compared with other potential investments," Ms Brown said.

Coming off a "great" 2020-21 season, and with farm gate prices as strong as she can ever remember them being, Ms Brown is riding high.

"It's such an exciting time to be a dairy farmer."

But the grim experience of 2016 is still close enough to make the Browns prudent, and there are clouds on the horizon.

Fertiliser prices are set to skyrocket as China, Australia's main supplier, halts exports. That will in turn push up grain prices.

Ms Brown said she was already pricing in those rising costs and they were exploring alternate methods of fertilising their crops.

But far from being anxious, she is optimistic.

"We're coming into this summer in a really good position.

"Six years ago we wouldn't have had silage sitting there, we would have had no margin for error."

Ms Brown noted that the biggest difference wasn't in their farm but in themselves.

"We are completely different people. We have confidence and control, and a purpose.

"We are creating a farm that's solid and sustainable, something we can pass on to our daughters."

Now just one tap with our new app: Digital subscribers now have the convenience of faster news, right at your fingertips with The Standard:

Our journalists work hard to provide local, up-to-date news to the community. This is how you can access our trusted content: