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Read our report analysing the impact of changes to farm milk supply patterns across Victoria and its impact on farm profit.

Dairy milk supply trends analysis

Analysis of Victorian milk supply trends from 2006-2012 shows there has been a clear shift towards increased off-peak production. This report analyses the impact of changes to farm milk supply patterns across Victoria and its impact on farm profit.

How can this report help dairy farmers?

The report can help farmers and industry professionals gain a greater understanding of the key drivers of farm profit given increasingly complex farm production systems.

The study was completed using data from the last six years of the Victorian Dairy Industry Farm Monitor Project including 134 farms from all Victorian regions and 416 sets of farm operational and financial data.

The project report highlights six key findings: 

  1. Increasing off-peak milk production does not guarantee a flat milk supply curve.
  2. Not all farmers have used more intensive supplementary feeding systems in the shift from a highly seasonal milk supply curve to more off-peak and higher plant utilisation.
  3. Farm operating cost and return on investment is poorly correlated with off-peak milk production and plant utilisation.
  4. The analysis shows that, regardless of off-peak percentage or plant utilisation levels, the most significant factor correlating with farm economics is the proportion of directly grazed pasture in the diet.
  5. The data shows that farms with less than 40% grazed pasture in the diet have a high risk exposure to milk price and feed price.
  6. The relationships between income, operating cost, margin, capital investment and return are consistent across all regions of Victoria. 

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