Strong performance for NSW dairy industry
22 Nov 2021
Confidence is high in the dairy industry, with the 2020-21 financial year recording the highest profit levels over the ten years that the NSW Department of Primary Industries (DPI) has been running Dairy Australia’s Dairy Farm Monitor Project in NSW.
NSW DPI Dairy Development Officer, Sheena Carter said it was pleasing to see an increase to forty-one in the farms participating in the project, indicating good support and interest from dairy farmers who are keen to understand the performance of their businesses using a nationally recognised methodology.
“With wetter than average rainfall and milder summer temperatures, most farmers were able to take advantage of the favourable seasonal conditions and generate a good operating profit,” Ms Carter said.
“However, in Autumn there were severe challenges for many farms particularly in the coastal regions where the one-in-one-hundred-year flood caused losses of pasture, animals, infrastructure, fencing and caused animal health issues, resulting in production losses.
“Despite these challenges, the continuation of strong milk and livestock prices, a reduction in purchased feed costs and the availability of more homegrown feed meant the average farm profit increased to $471,437 per farm, or $2.07/kgMS (Milk Solids). This is up from $269,897 ($1.05/kgMS) in 2019-20 and translates to a 4.9% Return on Total Assets (RoTA) managed.
“Then, taking into account interest and lease costs, this resulted in an average net farm income of $370,619, up from $162,689 the previous year.
“On average, we saw an 18.2% reduction in total feed costs, which was primarily due to lower purchased feed costs for concentrates, hay or silage and less purchased feed required due to better growing conditions for pasture and fodder conservation. This certainly helped drive the strong performance seen on many farms.
“By the end of the year many farms, particularly in the south, had been able to increase their feed inventory of hay or silage.”
Ms Carter said a business confidence survey forms part of the project each year, in which farmers are asked about future expectations and issues. Currently, sentiment is very positive, with a number of businesses acquiring new land during the year or upgrading farm infrastructure.
“For the year ahead, all farmers either expect to see stable or improving profits, with no-one anticipating declining profits,” Ms Carter said.
“Expectations are that costs to the business will remain stable, with the main exception being fertiliser prices, given the recent surges experienced with urea prices.
“As per the 2019-20 survey, the main challenge identified by farmers is climate change and seasonal conditions, followed by labour shortages, then milk price.
Dairy farmers and service providers are encouraged to join the next NSW DPI Dairy Breakfast webinar at 8:30am (AEDT) on 14 December to get more information on the results of the Dairy Farm Monitor Project. Please register to attend https://bit.ly/NSWDPIDairyBreakfastDec2021
Media contact: 02 6391 3686
