- Farm performance has been mixed in northern Victoria over the last six years;
- The 2012-13 Dairy Industry Farm Monitor Project annual report will be released on 15 August 2013; and
- A recent report provides insights into two profitable farm businesses.
Monitoring farm returns over multiple years is important for showing trends in farm profitability and production. Access to timely financial and physical information enables better decision making by industry, including farmers and government.
The Dairy Industry Farm Monitor Project provides such information.
In northern Victoria, the project has shown farm returns have been volatile, reflecting the market and climatic conditions over the past six years. The changes in return on assets and return on equity annually have tracked a similar trend to milk price (Figure 1).
In northern Victoria, the good rainfall and water allocation in 2011-12 helped farmers to reduce their cost of production by ten per cent, more than enough to offset the one per cent drop in milk price. This result saw farms improve their return on assets from seven per cent in 2010-11 to 7.7 per cent in 2011- 12. For the second consecutive year all farms reported a positive return on assets.
The 2012-13 season has been dry, although full irrigation allocations have helped maintain or improve production levels for many dairy farmers. Despite this, the decreased milk price and higher input costs are expected to have an impact on profit levels this year. The 2012-13 Dairy Industry Farm Monitor Project annual report will reveal the full impact of the season on farm profits when it is released on 15 August.
Drawing on the long term data from the Dairy Industry Farm Monitor Project, a recent report has provided insights into two individual farm businesses which have remained profitable over time. While the farms have developed significantly different farming systems, they share a fundamental understanding of the principles of running a profitable dairy farm and focusing on the critical variables that contribute to profit.
The Dairy Industry Farm Monitor Project is a joint collaboration between the Department of Environment and Primary Industries and Dairy Australia.
The report is available on the Dairy Australia website www.dairyaustralia.com.au/dairyfarmmonitor.
For more information please contact Claire Swann, DEPI Epsom, telephone (03) 5430 4697 or email firstname.lastname@example.org.