South-west dairy producers notch record profits

Data from the annual Dairy Farm Monitor survey showed the milk price rose by 33 per cent in Victoria in the 2022-23 financial year to hit $9.77 per kilogram milk solids (kg MS), the highest price in 17 years.

The collaboration between Agriculture Victoria and Dairy Australia tracked 80 of the nearly 2800 dairy farm businesses across the state to get a snapshot of the $2.9 billion industry. It found 77 of the 80 businesses recorded a profit for the financial year, with just one in five farmers predicting a drop off in 2023-24.

The strong profits flowed despite rising overheads. Herd and shed costs rose nine per cent, while feed costs shot up by 25 per cent and other overheads went up by 10 per cent. But these costs were more than covered by the record milk price, leaving an average profit of $2.87 kg MS, up from $1.72 the previous year.

South-west Victoria led the state's three dairy regions for profits, notching an average of $3.24 kg MS, compared with $2.68 for northern Victoria and $2.73 for Gippsland.

Victorian dairy farms produced 5.14 billion litres of milk for the year, nearly two-thirds of national milk production.

Agriculture Victoria sector development and services executive director Dougal Purcell said it was encouraging that farmers could ride the rising overheads and some historically wet conditions to record such strong results.

"It is pleasing to see Victorian dairy farmers come out on top following a year of higher business inputs, wet conditions and flooding," Mr Purcell said.

Dairy Australia research and innovation general manager Greg Jarman said farmers were confronted with tactical and operational decisions on a daily basis, so the data gathered in the survey was a crucial resource.

"Some of these decisions can have a lasting impact on the profitability and sustainability of their farm,' Mr Jarman said.

"The Dairy Farm Monitor Project is a valuable source of independent physical and financial data around a wide range of on-farm practices, equipping farmers with essential insights to inform their decision-making.

"This information also ensures that on-farm consultants and industry stakeholders can use reliable, independent and useful information and resources to provide good advice to farmers."

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