Management

Power prices hit farms

By Dairy News

Dairy farmers are being crushed under the weight of power prices, with climbing power bills impacting their ability to stay competitive.

The rising cost of electricity has hit farmers hard, with Australian Dairy Council figures claiming that dairy farmers spend between $35 and $75/day on electricity to power their dairies, compared to between $20 and $45/day seven years ago.

The power price spike has also hit Katandra West farmers Gayle and Laurie Clark, despite the couple installing a 30 kW solar system on the dairy shed roof a number of years ago.

While the system has resulted in significant savings, it hasn’t been enough to avoid climbing power prices.

“The solar system cut our dairy bill by about a third when we first installed them … unfortunately there has been increases in our power bills lately. No-one gets away without an increase unfortunately,” Mr Clark said.

“Looking at it now just sort of cements that what you did was a good decision. At the time is was a tough financial decision to justify.”

The Clarks have used power generated by the solar system to power their roller mill and drive their irrigation pump in the recycle dam, with the savings seeing the solar system paid off within a couple of years.

Yet while the Clarks have been able to ease their power price pain, Katunga dairy farmer and Australian Dairy Farmers natural resources and management group chair, Daryl Hoey, said he has heard instances of farmers’ bills doubling in recent months and has called on the federal and State Governments to do more.

“Significant solutions have to come from government input and it appears at the moment the government is on a complete freeze on thinking on this and don’t know how to react,” Mr Hoey said.

“Prices will continue to go up until they start to come up with some real solutions rather than just token gestures.

“We’ve got an embedded high cost in our system. Until governments completely rethink their distribution network and start to provide real alternatives to bring down the prices, there’s no real light at the end of the tunnel.”

Katamatite East dairy farmer Iwan Van Den Berg, who operates an 800 ha farm with his wife Melissa, and his brother Erwin and partner Julie, milking about 1250 cows, echoed Mr Hoey’s claims and said his electricity bills had been climbing for some time.

“They’re not quite double but they are certainly a lot higher (than they have been in the past),” he said.

“We’re trying to research all sorts of new ideas however there’s nothing getting done about it from higher up. We won’t be the only ones that would suffer as a result of the prices.

Gas is already a significant input cost for dairy processors in Australia. Based on reports, gas prices are forecast to rise between 50–100 per cent by 2019, according to the Australian Dairy Industry Council.

This will impact the processing of dairy and increase the manufacturing costs of milk products.