South Australian dairyfarmers are turning to diesel generators and power price brokers as they batten down against more crippling increases in energy costs.
Dairy farmers across Australia 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 Australian dairy farmers spend between $35 and $75/day on electricity to power their dairies, compared to between $20 and $45/day seven years ago.
Already paying the country’s highest power bills, South Australian farmers fear they won’t cope with another massive slug on their expenses.
Many farmers have brought diesel generators as back-up after last year’s power blackouts, but, flying in the face of the state’s renewables ambitions, they now might need them as cheaper alternatives to regular power supplies.
Farmer and SA Dairyfarmers’ Association (SADA) board member Sharon Joppich from Kalangadoo north of Mt Gambier, said the state’s power prices and problems were “a joke”.
“We haven’t had the first round of bills but I did some rough maths and worked out it would add about $700 a quarter to our dairy power alone. We’re already paying up to $5000 a quarter just to run the dairy.”
Mrs Joppich said the farm had bought a diesel generator because the state’s power supply was so unreliable. “We’re doing the sums at the moment and it might be cheaper to run our dairy on a diesel generator,” she added.
“Depending on which report you read and we won’t really know until we get our accounts, they’re predicting we’ll be paying between 20 and 40 per cent more,” Mrs Joppich said.
“The biggest concern is that we’re going to pay twice; we’ll pay our own accounts and then through the massive costs the milk processors are going to pass on to farmers.
“We cannot continue to absorb more costs; dairy farmers are pretty much already working for nothing as it is.”
Mrs Joppich said a SADA analysis shows it costs 40 per cent more to run a dairy in South Australia than across the border in Victoria.
“There’s not much more the farmgate can absorb,” she said.
There were 80 000 South Australian cows affected by blackouts last year, prompting SADA to make arrangements with SA power networks to get dairies back on as a priority as an animal welfare issue.
New measures are in place to ease the blackout threat this summer but farmers are not convinced and fear more price hikes.
“We’re lobbying very hard but every government passes the buck,” Mrs Joppich said. “It’s an absolute joke.”
“There are no incentives to go to solar or wind and how does it change the renewable target when people are going back to diesel generators?”
Mount Torrens farmer and SADA board member Rick Gladigau said farmers were preparing for “pumped up prices”.
Mr Gladigau has organised his power through a broker and has had only one bill for comparison, but he’s not hopeful.
“The government says the price will come down with everything they’re doing, but I don’t believe that,” he said. “The talk is that the price will go up further before it comes down and it’s already the most expensive place in the world.”
“We can’t pass on the price and the concern is that processors’ power bills are going up and they’ll pass it on to the farmer.”
SADA has worked with the government on reliability and is hopeful this summer will be better than 2016–17, with measures such as back-up generators and interstate connections in place.
“The concern has eased a bit but last year was just a disaster,” Mr Gladigau said. “I’ve had my farm 25 years and been on my parents’ farm before that and I’ve never had a year like it. I bought a generator because I’d had a gutful.
“We used to get power out for 12 hours and you’d manage; when it’s out for a few days and I’ve got cows that aren’t getting milked I’m not a happy chappy.”
“It’s crazy. We keep talking of being a clean, green energy state and yet people are out buying diesel generators.”
DairySA has been running energy forums to help farmers understand energy costs and to outline potential on-farm savings.