News

Farm profit holds up in Gippsland

By Dairy News

Varied seasonal conditions impacted farm performance throughout Gippsland.

South and west Gippsland experienced reasonable pasture growing conditions, while farms in the central and eastern areas had inconsistent rainfall that compromised pasture production.

The average rainfall across participating farms was 705 mm or 81 per cent of the long-term average.

A dry 12 months leading into the spring in 2018 saw an increased reliance on irrigation water for dairy farms in the Macalister Irrigation District (MID). Water allocations reached 100 per cent with no spill water by the end of the season, resulting in an increase in supplementary feed.

Herd size increased 5 per cent to 307 cows per farm and stocking rates increased slightly from 1.8 cows/ha to 1.9 cows/ha, usable area decreased from 189 ha to 186 ha in 2018–19.

The amount of homegrown feed as a percentage of ME consumed remained steady at 66 per cent of the cows’ diet. Feed costs increased by 22 per cent on average to $3.27/kg MS and comprised 55 per cent of total costs (variable plus overhead costs), a 22 per cent increase on last year.

Concentrate price increased 32 per cent to $518/t DM, silage increased 46 per cent to $365/t DM and hay increased 18 per cent to $341/t DM. Feeding levels remained similar with only a slight reduction in concentrates fed to 1.6 t DM/cow.

Average milk solids sold was 146 000 kg MS/ farm, 468 kg MS/cow and 888 kg MS/ha.

On average, farm EBIT reduced to $82 000 in 2018–1 down from $148 000 in 2017–18.

Net farm income also reduced to -$15 000, down from $52 000 the previous year, the third lowest on record.

Reduced farm profit contributed to a decrease in average RoTA and RoE, down to 1.7 per cent and -2.3 per cent