SOUTH-WEST VICTORIA is emerging as Australia’s dairy region of choice, with an influx of farmers looking for a potential safe haven from drought conditions.
While many sold dairy farms have been converted to beef or sheep over the past year, the trend is starting to reverse with more interest from dairy farmers and corporates and fewer existing farmers putting their properties on the market.
Several dairy farmers from northern Victoria, South Australia and New South Wales have relocated to the area and that looks set to continue.
The Warrnambool branch of Charles Stewart and Co sold 16 dairy farms last financial year, a higher than usual figure. While 13 of these properties went to beef and some sheep, the final three sales of the year stayed in dairy.
Sixty per cent of the farms not going back to dairy were bought by locals wanting to expand their beef and sheep operations. Forty per cent were purchased from farmers outside the region chasing seasonal security and feed, including purchasers from South Australia, central and northern Victoria and Wimmera. In many cases it was to supplement existing operations for seasonal security.
The last three dairy farms sold last year were to continuing dairy operations, with purchasers from north-east Victoria, south-east south Australia and one local.
“We had 13 in a row to non-dairy but as soon as people got a whiff of the new prices the tide started to turn, Charles Stewart and co Warrnambool director Nick Adamson said.
“That has continued into this financial year, though we don’t have the range of properties for sale at the moment,” he added.
Most farms selling to grazing went for $4 – $5000 an acre. “Graziers wanted the land because it was good value and the northerners were chasing feed and water,” Mr Adamson said. The demand was also fuelled by a lack of grazing properties on the market.
Mr Adamson said there wasn’t such a large supply of dairy farms this year, a sign that dairy farmers are more positive.
Those on the market are expecting $6000 or better. “There’s a sniff that it’s on the way up; there’s more confidence in the industry.” Mr Adamson said.
Mr Adamson said he expected the Warrnambool experience was being replicated in other areas.
WestVic Dairy executive officer Lindsay Ferguson said the trend of northern farmers showing interest in the region had been identified late last year.
“Anecdotally, we hear that there is a fair number of farmers relocating to the area, although we don’t have specific figures,” he said.
A survey at the start of the year showed confidence in the region was at its lowest level but Mr Ferguson there had been an upswing of positivity during the year.
Mr Ferguson said WestVic Dairy was working with industry stakeholders in identifying dairy farmers new to the district and making them aware of services and support. “There are quite a few management issues here that differ from the drier regions and we are keen to hear from any newcomers,” he said.
The latest Dairy Australia Situation and Outlook report says a timely autumn break has provided a kick-start for south-west Victoria, buffering the impact of high purchased feed costs.
However, cashflow remains an issue for many farmers, and milk production has continued to slip in year-to-date terms as culling is carried out.
Overall, Australia’s milk production trails 2017–18 levels by 6.7 per cent, with south-west Victoria exceeding production expectations. In July Victoria’s production was down by 7.1 per cent, while the WestVic region declined by 6.4 per cent.
The Situation and Outlook found 68 per cent of WestVic respondents made a profit in 2017–18, but this year 6 in 10 farms expect profit levels to be lower than the five–year average.