Results from the latest Dairy Farm Monitor Report shows average profits were the highest on record for the 30 northern Victorian participants at $620,000 ($2.68 per kilogram of milk solids) in 2022-23, well above the long-term average of $1.15/kg MS for the region.
The main influences on northern Victorian dairy farm performance were:
- Very wet spring 2022 conditions and flood impacts hampered fodder conservation and increased feed costs.
- Total variable costs and total cash overhead costs in northern Victoria were among the highest in 17 years at $8.29/kg MS, increasing by $1.55/kg MS from the previous year.
- Increase of 31 per cent in milk price to $9.84/kg MS to the highest milk price observed in 17 years.
- Increase of 26 per cent gross farm income to $10.97/kg MS compared to the previous year, despite livestock trading income reducing.
- Most (90 per cent) participants were feeling optimistic about the 2023-24 season.
On average, herd size increased slightly but milk production per cow decreased.
Home-grown feed fell to 54 per cent of the cows’ diet (from 56 per cent the previous year) due to challenging climatic conditions, especially the flood and storm events in spring 2022.
Participants managed the lower quantities of home-grown feed by securing purchased feed early and feeding greater quantities of purchased concentrates.
While northern Victoria experienced significant flood and storm events, Gippsland experienced quite wet and then quite dry conditions, while south-west Victoria managed very wet conditions for many months.
Across the state, the average profit for all 80 Victorian farm businesses was also strong at around $2.87/kg MS in 2022-23.
This was a 67 per cent increase on last year, and well above the long-term average of $1.45/kg MS.
The greatest influence on the improved profits of Dairy Farm Monitor participants was the 33 per cent increase in statewide average milk price to $9.77/kg MS.
Total variable and overhead costs increased by 18 per cent, with significant increases in purchased feed costs and employed labour costs.
This impacted on farm business margins and moderated potential profits.
Now in its 17th year, the Dairy Farm Monitor Project is a joint initiative between Agriculture Victoria and Dairy Australia.
It provides comprehensive financial and production analysis of 80 Victorian dairy farm businesses in northern Victoria, the south-west and Gippsland.
The northern Victorian farm data was collected by Agriculture Victoria staff, Murray Dairy staff and consultants.
The Dairy Farm Monitor Report is available online at: agriculture.vic.gov.au/dairyfarmmonitor
By Agriculture Victoria farm business economist Natalie Nelson