Is leasing the future for Queensland dairying?

30 May, 2017 02:00 PM
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atthew Cahill is a fifth generation farmer in Queensland's Beaudesert district and now believes it's time to 'shut the gate' on dairying.
We basically have had enough of being financially stressed running our dairy operation.
atthew Cahill is a fifth generation farmer in Queensland's Beaudesert district and now believes it's time to 'shut the gate' on dairying.

It’s time to ‘shut the gate’ on dairying for Queensland dairyfarmer Matthew Cahill.

But it won't be the end of the dairy operation on his property as another farmer has decided to lease the farm, including its robotic dairy from the family.

It wasn’t an easy decision for Mr Cahill but he said he believed it was the best way forward for his farming business.

In March, the Cahill family sold their 300 head of dairy cows and leased out part of their property plus the milking shed, which includes five DeLaval automated milking robots, to the buyer of their dairy cattle.

“It has been a battle for the last six years trying to make ends meet and for half that time I’ve milked 300 cows a day on my own without any employees,” Mr Cahill said.

“It got to the stage I just wore myself out.”

Mr Cahill said about seven years ago the milk processor he supplied cut 5 cents-a-litre from his farm gate milk price.

“Back in 2010 we were getting around 58 cents-a-litre for our milk, but the price has continued to fall since then to 53-cents-a-litre and lower,” he said.

“In addition, all our costs have continued to grow especially with a big increase in electricity prices over the last six to seven years.”

The Cahill family have been farming for five generations on their property called Hillview on Christmas Creek near Beaudesert.

“We basically have had enough of being financially stressed running our dairy operation,” Mr Cahill said.

“We put the DeLaval milking robots in our dairy shed about seven years ago mainly to help cut down labour costs and issues plus improve our milking efficiency.

“It was only six months after we spent a lot of money setting up our robotic dairy and increasing debt the $1-a-litre milk price started in the major supermarkets.

“The money we’d planned from our cash flows to pay off the robots was wiped out overnight by the lower milk prices.

“You get a feeling you're busting your gut for years and years to make a good life and provide for your family, but you just can’t make dairying a profitable and sustainable operation anymore.”

Mr Cahill found the biggest financial issue with running his dairy business after the fall of farmgate milk prices was having no surplus money for general maintenance.

“We just managed to pay our bills every months, but there’s no financial margin to maintain tractors or any other part of the dairy farm and equipment,” he said.

“It’s a flow-on effect when you don’t have any income to invest back into the dairy farm’s infrastructure and machinery everything starts to get very run down and it creates a difficult financial situation.”

Mr Cahill sees the leasing out of his dairy operating as a more financially sustainable way of achieving an income stream, especially from their investment in the robotic milking shed.

“We were originally going to just sell the dairy cows, but the farmer who purchased our cows was interested in leasing the robotic dairy shed as well,” he said.

“I don’t think there’s many people in Queensland interested in getting into dairying, but we were lucky to find a current dairy farmer who wanted to expand their operation.”

The Cahill family are now planting crops on the remaining portion of their property with a plan to produce silage, hay and grain.

“There will always be dairying because I don’t think it will get to a stage where no milk is produced in Queensland, but if milk processors aren’t prepared to pay farmers a fair price then I think dairying will be a declining industry in our sunshine State,” Mr Cahill said.

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