Best dairy operators keep costs in check

Consultant Chris Scheid, Pro Advice, Victor Harbor, SA, said the top 25 per cent of farms in the project were not necessarily better at getting returns.

“The top 25pc is not really about income, but what happens after income; the costs,” he said.

The project collects data from 20 farms in the Mid North, Fleurieu, Lakes and River and South East, representing different locations, farm and herd sizes, management structures and feeding regimes.

Mr Scheid said this provided a snapshot of the industry. For the 2014-15 season, he said the season was the biggest influence on production and profit.

“No farms reported achieving even average rainfall,” he said.

Because of this major factor, the top five performing farms in the project were all irrigators, following on from three of the top five, the year before.

The milk price was another important factor to consider.

The project showed, for many farmers, the milk price was covering costs, while on-farm profits came from selling excess stock or feed.

“This was at a milk price of $6.35 a kilogram (milk solids) and it’s fallen to $5.80/kgMS,” he said.

Mr Scheid said anecdotally, the 2014-15 financial year was one of consolidation, rather than growth, for many dairyfarmers.

“This year (2015-16) is a cut, copy and paste from last year but with lower milk prices,” he said.

Mr Scheid said, with the similarity between the two years, it was a good chance for farmers to look at some of their decisions from the previous year.

“Farmers can look at last year’s results and fine tune what didn’t do well and repeat what did,” he said.

The Agribusiness Dairy in Focus forecasts a slow recovery in dairy prices this year, with support from the weak Australian dollar.

Murray Valley regional agribusiness manager Dave Davies said the low $A of the past months had shielded Australian producers from much of the global dairy price tumult.