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Read the National Dairy Farmer Survey for 2015.

National Dairy Farmer Survey 2015

National results

Summary

As measured through the National Dairy Farmer Survey (NDFS), overall farmer sentiment is comparable with 2014.

Notwithstanding significant regional variability, 74% of farmers report feeling positive about the future of the dairy industry and a high proportion (79%) anticipate a profit this financial year.

Underpinning this is a significant increase in farmers who believe demand growth will continue, both domestically and globally. 

In terms of perceived challenges for the months ahead, the survey revealed heightened concerns about the level of new season farmgate prices, but also that there is reduced concern overall about input costs and climate compared to this time last year.

Key themes

Three themes have emerged from the 2015 national dairy farmer survey data:

  1. More than 80% of farmers made an operating profit in 2013/14 and a similar proportion are expecting a profitable year in 2014/15.
  2. Announcements of Free Trade Agreements have been well received, though they are seen as being more beneficial for manufacturers and the industry in general than for farmers directly.
  3. Farmer sentiment in the Subtropical Dairy region has improved significantly in 2015.

Regional results

Murray Dairy:

  • Confidence has remained higher in Murray Dairy than the national average despite an easing in the proportion very positive about the future – due (at least in part) to some concerns about whether farm gate milk prices will continue at their current level.
  • Profitability has been widespread again over the past year, enabling most of the region’s dairy farmers to invest on-farm.
  • Survey results suggest some de-stocking has occurred in the region, but despite this, herd production levels have increased overall.
  • Intentions for the coming year and beyond suggest herd sizes and production levels on almost all farms will either remain the same or increase.
  • Conversations about the long term viability of the industry have generally been positive and Murray Dairy farmers are among the most likely to be encouraging family and employees to remain in the industry.

WestVic Dairy:

  • While confidence in the future has remained high in among WestVic Dairy farmers, it has eased over the past 12 months due to more widespread concerns about whether farmgate milk prices will remain at current levels.
  • Over the past year, 11% of respondents changed milk company supplied and a further 10% are considering doing so, with price as a key driver.
  • At current levels, the vast majority of dairy farmers are able to realise an operating profit, allowing many to invest on-farm.
  • Average herd size in the region has remained relatively unchanged, but per cow production has risen with intentions to continue this trend.
  • WestVic Dairy farmers are substantially more likely than their Murray Dairy and Gippsland counterparts to have spoken negatively during the past 6 months about the long term sustainability of the industry.

GippsDairy:

  • Sentiment about the future of the industry has remained unchanged in the GippsDairy region over the past year although there is some evidence that concerns over farmgate milk price are growing.
  • Profitability has been widespread, enabling on-farm investment on more than half the farms in the region. The proportion anticipating doing so over the coming year is one of the lowest nationally however, but this may be due to lack of need rather than lack of finances.
  • Dairy farmers in the region are some of the most loyal suppliers nationally, with only 6% recently changing companies supplied and a low 4% considering doing so.
  • Survey results suggest there has been a slight increase in the number of cows being milked in Gippsland but production levels have grown. Intentions for the future are similar.
  • Conversations about the long term viability of the industry have more likely been positive than negative and most dairy farmers are encouraging others to remain in the industry.

Dairy NSW:

  • Confidence in the future has remained high in the Dairy NSW region where respondents are the most likely nationally to say they are very positive about the future. Over the past year, 1 in 5 of the region’s dairy farmers have changed the company they supply – the largest proportion nationally – with farmgate price being the key driver. A further 5% are considering change.
  • Profitability has been widespread, allowing more than half the survey respondents to invest on farm both last year and in the coming year.
  • While respondent herd size seems to have decreased slightly, this had not had an impact on the total milk supplied. Future intentions suggest herds are likely to grow along with production.
  • Recent conversations about the long term viability of the industry have typically been positive and most dairy farmers are encouraging family and employees to remain in the industry.

Subtropical Dairy (SDP):

  • Over the past year, confidence in SDP has risen significantly, but dairy farmers in the region are still the most likely in the country to feel negative about the future, with concerns over farm gate milk price still widespread, but easing.
  • There has been considerable movement in the company supplied, with evidence that SDP farmers are chasing better farmgate milk prices on offer by some companies and this may be the reason for improved sentiments.
  • SDP dairy farmers remain the least likely nationally to realise an operating profit and as a result less than half are making on-farm investment.
  • Respondents’ herd size and productivity have grown over the past year and while the overall intention is to increase milk volumes over the coming years, it will be through greater per cow production rather than increased herd sizes.
  • With attitudes remaining quite polarised in SDP, it is not surprising that conversations about the long term viability of the industry are almost as likely to have been negative as positive recently.

Dairy SA:

  • Confidence in the future has fallen in SA over the past year and is now significantly lower than the national average due to growing concern over farm gate milk price and impact of climate.
  • While profitability was very widespread for the 2013-14 financial year, it is expected to be less so for this year – impacting the proportion of dairy farmers able to invest on-farm.
  • Although the vast majority of the region’s dairy farmers are staying loyal to the company they supply, up to 20% have either changed or are considering doing so to achieve a better price.
  • Milking herd size and production fell considerably during the past year in respondents’ herds and while many intend to keep milker numbers stable, per cow production is expected to rise.
  • Despite increasing negativity, conversations relating to the long term viability of the industry are more likely to have been positive than negative and a reasonably large proportion of the region’s dairy farmers are still encouraging people to remain in the industry.

Western Dairy:

  • Confidence in the industry’s future has continued to climb in WA, although farm gate milk price is still seen as a challenge.
  • Profitability has continued to be widespread and appears to be increasing. Despite this, the proportion of dairy farmers investing on farm has remained fairly consistent.
  • The ‘average’ milking herd has reduced in size but production levels have only fallen slightly. Future intentions suggest that herd sizes and production will remain the same or grow rather than contract further.
  • WA dairy farmers have typically remained loyal to the company they supply in recent times but there are a number who are currently considering changing for a better farm gate price.
  • Recent conversations about the long term viability of the industry are slightly more likely to have been positive than negative.

Dairy Tas:

  • While Tasmanian dairy farmers are still the mostly likely in the country to be positive about the future, there is some evidence that concerns over farm gate milk prices are becoming more widespread.
  • Although almost all the Tasmanian respondents realised an operating profit last financial year, the proportion expecting to do so this year is substantially lower.
  • Loyalty to the company supplied is strong in Tasmania, with only a small proportion changing or intending to change the company they supply.
  • Respondents’ milker numbers remained steady over the past year, but per cow production increased overall. These increases are expected to continue over the next 3 years.
  • Tasmanian dairy farmers have been the most likely to speak positively about the long term viability of the industry recently and they typically encourage people to remain in the industry. 

For the full survey results, download the June 2015 Situation and Outlook report (PDF, 2.55MB).

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