Report highlights dairy challenges

07 Sep, 2018 11:50 AM
Comments
0
 
While the season was challenging, milk price improved by 15pc on average to $5.81/kg MS...

Profit on Victorian dairy farms fell in 2017-18 to the fifth-lowest level in 12 years.

But the 2018 Dairy Farm Monitor Report released on Wednesday found return on total assets was constant.

Agriculture Victoria farm business specialist Claire Waterman said the results reflected the challenging seasonal conditions, despite improved milk prices.

The report also revealed differences between regions.

Ms Waterman said return on total assets (RoTA) remained constant at 2.5 per cent across the state on average.

This ranged from 3pc in Gippsland to 2.5pc in Northern Victoria and 1.9pc in Western Victoria.

“Average profits remained comparable with the 2016-17 year with whole farm earnings before interest and tax (EBIT) decreasing to $159,000, compared with $167,000 reported in 2016-17," Ms Waterman said.

In 2017-18, 60 of the 75 farms recorded a positive RoTA.

The largest loss was -5.3pc and the highest return was 10.6pc.

“While fewer farms recorded a positive result compared with the previous year (67 of the 75 farms), the range was narrower this year,” Ms Waterman said.

“When interest and lease costs are considered, farm profits fell to their fifth lowest level in the project’s 12-year history at $49,000 as measured by net farm income and return on equity at 0.4pc.”

Ms Waterman said all Victorian dairying regions had had challenging seasonal conditions in 2017-18, with reduced rainfall compared with the previous year resulting in decreased home-grown feed as a percentage of metabolisable energy consumed.

Farms fed additional imported fodder, at generally higher prices, and utilised their feed reserves to manage the long, dry, hot summer.

"As a result, purchased feed and agistment costs increased by 16pc across the state, from $1.55/kilogram milk solids in 2016-17 up to $1.80/kg MS in 2017-18.”

She said while the season was challenging, milk price improved by 15pc on average to $5.81/kg MS, up from $5.07/kg MS and was the seventh highest price in the 12-year history of the project.

Ms Waterman said farmers’ expectations about their business returns for the 2018-19 season were cautious.

“While over two-thirds of farmers predict their business returns will improve, many participants were concerned about seasonal variability in the coming year," she said.

"Input costs were the major issue identified for the coming 12 months, while milk price and climate variability were also identified as concerns over the longer term.”

The Dairy Farm Monitor Project provides farm level data relating to dairy profit and production in Victoria and was produced for the 12th time this year.

The project is a joint initiative between Agriculture Victoria and Dairy Australia.

Page:
1

POST A COMMENT


Screen name *
Email address *
Remember me?
Comment *
 
A new definition of 'genetically modified' currently awaiting parliamentary approval could see a swathe of new grasses on the market within three years.
13 Nov 18 A new definition of "genetically modified" currently awaiting parliamentary approval could see a swathe of new...
A person normally breathes about 25,000 times a day, with the lungs taking in oxygen from the air and delivering it to the bloodstream.02 Nov 18 A person normally breathes about 25,000 times a day, with the lungs taking in oxygen from the air and delivering it...
light grey arrow
Olivia - what you fail to consider is that animals fed the crops you speak of aren't evolved to
light grey arrow
If that’s what they think the milk volume drop will be they are in for one hell of a shock. 200
light grey arrow
A well planned vegan diet is certainly not nutrient deficient. But aside from that, the entire
Amidst rising farm costs, Dairy Australia has developed a range of energy information resources to assist farmers to make smarter use of energy to reduce power bills.
13 Nov 18 Amidst rising farm costs, Dairy Australia has developed a range of energy information resources to assist farmers to...
Accurate and up-to-date paperwork is crucial for all dairy farmers. But as a farm manager, Allen Hook says the ability to keep precise records is what keeps him in a job.12 Nov 18 Accurate and up-to-date paperwork is crucial for all dairy farmers. But as a farm manager, Allen Hook says the...
Australian farm chemical manufacturer Nufarm has repaired its balance sheet and is now hunting for acquisition opportunities.25 Sep 16 Australian farm chemical manufacturer Nufarm has repaired its balance sheet and is now hunting for acquisition...
Monopoly market may confront cropping sector under mega-merger proposal.22 Sep 16 Monopoly market may confront cropping sector under mega-merger proposal.