Australian dairy farm incomes on the up

A recent report from government bureau ABARES indicates a 29% increase in average dairy farm cash incomes.

Australian dairy farm incomes increased during the 2013-2014 financial year, according to a new government report. The income increase coincides with a 45 percent decrease in the total number of dairy farms across the country over the past 10 years.

The increase in cash incomes was mostly attributed to large increases in milk prices for dairy farmers in southern New South Wales, South Australia, Victoria and Tasmania, and smaller milk price increases across other regions.

The average farm cash income rose to A$129,000 during the year, up 29 percent on 2012-2013 figures, according to the report. The average rate of return also increased during the period to 3.1 percent from 0.9 percent during the previous year. The average over the past 10 years to 2013- 2014 was 2.1 percent.

milk prices

The combination of higher farm incomes and better seasonal conditions also meant that fewer farmers needed working capital and thus debt than during previous years; Australia’s dairy sector is generally criticised for the high levels of debt it holds.

Agriculture minister Barnaby Joyce was pleased with the data according to an article by FarmOnline, a local news service, which quoted him as saying:

“The rebound in dairy farm fortunes we’ve seen last financial year is great news for an industry that contributed $2.2 billion to Australian exports in 2013.

“The Australian dairy industry operates in a highly competitive global environment with heavy pressure on farmgate milk prices, big swings in world prices for traded dairy products and variable seasons that often demand significant investment in fodder,” Mr Joyce said.

“We are already seeing dairy processors and manufacturers successfully establish and expand export market opportunities into Asia.

“This is an industry that has responded very effectively to constantly changing circumstances, driving consistent productivity improvement through responsible farming and better application of technology.”

The report was published by ABARES, a research bureau within the Department of Agriculture.