Executive Summary 

Data was analysed on NSW regional dairy farm financial performance for the period 1991-92 to 1996-97. It clearly showed that three regions, the Riverina, the South Coast and the other inland areas had superior financial performance figures compared to the Metropolitan, Mid- North Coast and Farm North Coast areas. Regions with superior financial performance generally produced more milk and had lower overhead costs and variable costs on an cents per litre basis. The results indicate that there is likely to be a trend to greater proportion of the total production coming from areas where financial performance is greatest. This view is supported by the evidence that these areas have also been the areas where there has been the greatest re-investment taking place.

However, regional trends will not be influenced by overall financial performance alone. Factors such as opportunities for alternative land uses, access to manufacturers, water availability and the demand for rural land are all factors that will also influence regional trends into or out of dairy production.