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Dairy industry statistics from 2004
Summary
Dairy farming is a major industry within the AlpValleys region,
with a GVP of over $70 million from 1,700 farms in the region. Towong
Shire contains the largest component of the industry (37 %) with
Indigo Shire, Wangaratta Rural City and Alpine Shire sharing a further
60%. The industry, whilst strong, is affected by market and climatic
conditions.
North East Region |
1996 – 97
AG Census |
2000 – 01
AG Census |
2001 – 02
AG Survey |
2002 -03 Ag Survey |
Gross value of production |
$57,708,741 |
$69,204,106 |
$79,828,348 |
|
Volume of Milk Produced (litres) |
|
230,760,667 |
266,195,718 |
|
Current herd size (number of
milk cows) |
66,573 |
73,237 |
43,958 |
46,438 |
Contribution to Victorian GVP
of commodity |
3.8% |
3.5% |
|
|
Contribution to Australian
GVP |
2.1% |
2.3% |
|
|
Estimated number of farms |
390 |
316 |
1,753 |
1,723 |
Source: ABS Agricultural Census 1997 and 2001, Agricultural Survey
2002
Dairy industry overview
Dairy Australia recently completed the Dairy 2004 Situation and
Outlook report. The report made the following key findings for the
whole of the dairy industry. These findings are relevant to the AlpValleys
region:
- The dairy industry has faced enormous challenges in recent years
and many farmers are cautious about future prospects.
- Cash flows and confidence have been significantly weakened and
recovery may be slow.
- There are signs of recovery and reasons for optimism.
- The external fundamentals of the industry environment are sound.
- Many farmers are “watching and waiting” for better
seasonal or price conditions.
- It is important for the industry to work together to address
the key issues raised in the report.
Detail |
Comments |
Product description |
Products including milk, cheese, cream, yoghurt,
ice cream, butter for local and export markets |
Main season |
Not considered seasonal, though April and May
are viewed as slower periods. |
Industry associations |
Dairy Australia Limited, Australian Dairy Industry
Council, Australian Dairy Products Federation United Dairyfarmers
of Victoria |
Domestic market information |
Dairyfarmers in the region reported selling
a litre of milk from anywhere between $0.20 and $1.30. Milk
is transported from dairy farmers to the Murray
Goulburn Co-op and smaller processors where it is processed and distributed. |
Export market information |
Dairyfarmers reported that a large share of
their milk is exported - between 60% and 90%; mainly to Asian
countries like Japan. |
Source: AAVAF Survey 2004
Location of the dairy industry within North East Victoria
2001 Ag Census |
%
of GVP |
%
of production volume |
%
of farms for commodity |
North East Region |
Victoria |
North East Region |
Victoria |
North East Region |
Victoria |
Alpine Shire |
15.2% |
0.5% |
14.3% |
0.5% |
18.0% |
0.9% |
Benalla (RC) |
0.6% |
0.0% |
0.7% |
0.0% |
1.7% |
0.1% |
Indigo Shire |
25.0% |
0.9% |
24.8% |
0.9% |
22.3% |
1.1% |
Towong Shire |
37.8% |
1.3% |
37.1% |
1.4% |
36.8% |
1.7% |
Wangaratta (RC) |
19.6% |
0.7% |
21.0% |
0.8% |
18.5% |
0.9% |
Wodonga (RC) |
1.9% |
0.1% |
2.1% |
0.1% |
2.7% |
0.1% |
Source: ABS Agricultural Census – 2001
Projected dairy industry growth
Source |
Indicator |
Comments |
(ABS) AG Census and survey
data |
Growth in production volume 1997 to 2001 |
Milk production has increased significantly
during this period. |
Surveys |
Current profitability |
Responses ranged from satisfactory to very
low. |
5 year business plans |
Some dairy farmers reported no change in plans
while others were looking into switching to beef farming, or
increasing their current beef herd. Some were also interested
in increasing production. |
5 year business outlook |
Ranged between satisfactory and poor. |
Business planning / budgeting |
The majority of respondents stated they drafted
formal business plans / budgets, mostly for 1 year ahead. |
Age of producers |
Dairy farmers surveyed were mainly in the age
bracket of 50 to 59 years. |
Capital expenditure 2002-03 financial year |
Ranged from $18,000 to $184,000, and from between
9.7% to 16.8% of gross income. |
Owners of larger dairy herd numbers, new entrants or younger generation
dairy farmers held a more positive outlook, based on a combination
of reliable seasonal conditions and stable milk pricing, at the time
of survey.
Dairy industry labour requirements
Detail |
Comments |
Estimate of labour employed
directly:- (based on 46 survey responses) |
Dairy farmers each employee
between 1 and 4 full time staff, 1 - 2 part time staff and
1 -2 casual staff. |
|
|
Areas of indirect employment |
Murray Goulburn
Co-op employs 150 full time
and 10 casual workers, transport providers. |
Labour market issues |
The majority of dairy farmers surveyed stated
there was a lack of suitable labour within the region to meet
their requirements. |
Dairy industry marketing activities
Detail |
Comments |
Marketing undertaken |
None was stated, and in fact some dairy farmers
stated that none was required, as a result of the Murray
Goulburn cooperative being responsible for selling and distribution
of milk produced. |
Value adding activities |
A large percentage of Victorian milk goes to
manufacturing and export. |
Labels and brands |
Murray Goulburn, Devondale, Kiewa and Gundowring
Fine Ice cream. |
Dairy industry strategic advantages and opportunities
-
The North East regions climatic conditions
provide for a pasture-based dairy industry that keeps milk production
costs relatively low. The industry is located in regions that
provide a suitable climate; predictable for 6 months of the year,
providing necessary pasture growth for food supply and on-farm
storage water availability. Supplementary grain feed costs are
also regionally accessible in market and transport terms, reducing
costs associated with these as a farm input.
-
-
Good infrastructure, including sound road network.
-
Many producers have direct control over production and manufacturing
through their association with co-operatives. In effect, farmers
have access to an efficient production system and processing infrastructure
within the region, creating a close connectivity between farm gate
and final product.
-
Processing facilities located in the North East region provide
a strategic advantage in gaining access to major metropolitan markets
through a well-located and serviced transport infrastructure.
-
Enhancing the skill base of the industry to help maximise farm
and resource performance for individuals, and therefore more efficient
dairy farms.
-
More dairy farmers are opening up land for agistment to beef
cattle as opposed to dairy cattle, creating a shift in herd numbers
and on farm production, as often this practice allows for less
intensive land and farm management practices.
Dairy industries strategic disadvantages and impediments to growth
-
Low profitability of business due to lack of selling power and
the low price received for milk, coupled with rising input costs
such as capital infrastructure requirements, government fees and
charges, and vet costs.
-
Age of dairy farmers and lack of new dairy farmers coming into
the industry.
-
Overseas market prices and fluctuating exchange rates affecting
certainty of prices domestically.
-
Lack of suitable labour.
-
Unfavourable weather conditions over the past few years leading
to water shortages for a number of dairy farmers in the region.
-
Increasing price and availability of water for irrigated pasture
production.
-
Land values are increasing through urban
encroachment creating a demand for “rural lifestyle living”,
which in turn makes land acquisition more costly to the industry.
-
The dairy industry is mostly comprised of
farming operations that are traditionally structured and managed
within the family unit, using little outside labour. This reduces
opportunities for generational change and industry opportunity
for younger persons to enter the industry, possibly restricting
a “mindset” change
toward industry and on farm practices.
-
Increasing pressure and costs including government taxes, rates
and charges, on farm dairy factory quality assurance requirements,
animal welfare, animal health and biosecurity requirements. Many
farmers are also experiencing greater pressure for environmental
compliance.
-
The dairy industry in the AlpValleys region is reasonably conservative,
and properties tend to be held tightly.
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