Labour issues, the housing crisis, cattle prices and land values — all these factors are combining to rip the band-aid off issues that matter in the dairy industry specifically, and agriculture more widely.
A string of dairy herd dispersals in October has shone the spotlight on a changing industry.
There are more complete herd dispersals planned for Victoria and NSW farms between now and July 2023.
At risk is Australia’s milk production, especially export markets.
While farm gate prices have risen due to increased competition between processors, that masks the reality that domestic milk production is stable at the expense of export volumes, due to decreased cow numbers.
In the same report on estimates, Dairy Australia expects domestic volume to remain stable because of increased pasture production. This estimate was made prior to continued widespread flooding and ongoing wet conditions across dairy regions in NSW, Tasmania and Victoria.
These results are being seen in the marketplace, with farmers exiting from dairy.
Terry Ginnivan, livestock agent with Nutrien Ag South Gippsland Livestock, said more than 550 dairy cows were sold through his agency in the past month.
“Herds are being reduced or sold because of the workforce shortage,” he said.
Terry’s view is endorsed by other agents.
Andrew Mackie, of Dairy Livestock Services, said many farmers selling dairy cows were selling their farms, downsizing their herds or switching to beef cattle.
This was having a flow-on effect to the local economy, not only to his industry.
“I’m losing clients who are getting out of agriculture, but it’s affecting milking machine technicians and service providers to the dairy industry,” Andrew said.
“It’s diminishing the milk pool for the whole of Australia.
“It’s mostly domestic consumption that will be retained. Australia’s production to the export market is diminishing.”
He saw two clients sell their herds in October, after selling their dairy holdings and downsizing.
But there have been some fantastic prices paid for commercial milking cows and heifers.
At the Avonlea sale, held on the property of John Gardiner and family at Nar Nar Goon, a heifer backed by four generations of EX dams and many show winners sold for $32,000.
Avonlea Denver daughters sold at $28,000, $26,000, $21,000 and $16,000, to registered buyers from all over Australia.
The SpringValley commercial Jersey sale, held at Mortlake Selling Centre in October, saw a record price paid for an unregistered five-year-old cow at $11,000. Other cows sold for $8000, $8500, $6500, $5500 and $5000.
The 43, two-year-old milking heifers averaged $4262. The herd of 138 Jersey cows and heifers grossed $511,500 and averaged $3706.
At Koonwarra VLE, the Gwenalan Holsteins herd was dispersed on behalf of Grant and Sheryl Hosking, of Milford. The couple decided to retire from the dairy industry, and have retained a herd of F1 cows to breed vealers and trade steers.
“My father purchased this property in 1955 and always had a registered dairy herd, that he brought across from Dromana,” Grant Hosking said.
“Sheryl and I have been dairy farming for the past 42 years.”
He was pleased to see the younger cows, up to fifth lactation, sell well to $3800.
Most of the herd stayed local, scattered among a number of buyers, with a few older cows heading into South Australia.
“We sold all our heifers to the export market,” Grant said.
Andrew Mackie said buyers from northern Victoria and across Gippsland bid on the cows that were part of the Wildwood dispersal sale, held at Lardner Park Selling Centre in October.
A heifer topped the sale at $7000, and one of her sisters sold to the same buyer for $6500. Other young cows went for $5500, $5100 and $5000 for an average of $3815 for 102 cows and $4000 average for 56 milking two-year-olds.
The dispersal sale of the Blossomvale Holsteins herd, at Jancourt East, attracted bidders from western and northern Victoria and saw prices attain a high of $7500, for an eight-year-old cow.
Other registered cows sold for $6500, $6000 and $5000, for a gross of $466,400 and average $3405 for the herd of 137 Holsteins.
Ross Suares, of Dairy Livestock Services, said many farmers in the Western District had decided it was a good time to get out of the dairy industry, although not everyone was selling their farms.
“We’ve had a lot of sales statewide, there’s a generational change occurring,” Ross said.
“A lot of farmers are 60 and above, and are transitioning out of the dairy industry.
“Some of them are selling their farms. They can realise quite a bit of money now with a decent sized farm, and can set up a pretty decent super fund from the sale proceeds.
“Others are transitioning to beef, mostly to have a break from the workload and transition slowly to retirement.”
On the other hand, Ross also said the milk price was encouraging other people to stay in dairy, or move into dairy.
“I’d say two years ago, 90 per cent of dairy farms were sold and were used for beef and sheep. This year, 50 per cent are retained as dairy farms,” he said.
“We’ve sold a few herds of cows to people coming back into dairy in western Victoria and Gippsland.
“Some are investors and some are farmers from the north looking for more reliable rainfall.”
A major factor in the exit from dairy was labour and housing, and those issues were connected, Ross said.
“Every time we have a round table discussion, between ourselves and other industries, it’s the same. There’s major shortages of people available to work, there’s even a shortage of overseas workers,” he said.
“It’s the same for everyone, definitely labour is the big issue for 90 per cent of farms. Particularly once you get over 200 cows, and you have to have a labour unit.
“Lack of labour is not sustainable long term. Many of the farmers leaving the dairy industry have been doing it without labour for a couple of years, and they can’t keep doing it.
“You won’t get a farm worker without a house, unless it’s someone who already lives locally.
“Rental housing is a major factor in the availability of labour.”
At the recent Jobs and Skills Summit, hosted by the Federal Government, agriculture was recognised as an industry producing $100 billion a year in food and fibre products. Dependent on that goal is a reliable skilled workforce.
In the summit outcomes statement, the last paragraph on the last page is the only reference to agriculture — committing government, industry and unions to pursue solutions to attract and retain workers in the agriculture sector.
Without referring specifically to the food and fibre sector, the summit outcomes statement does refer to the Pacific Labour Mobility scheme as part of a raft of recommendations to increase numbers of migrants to meet skilled labour shortages, including in regional areas.
But without housing in regional areas, particularly in dairy areas that are still recovering from bushfires and floods, how can workers be attracted and retained?