Dairy farms in northern Victoria were more profitable than those in other regions, the latest Dairy Farm Monitor report has found.
The report surveyed 80 selected dairy farmers in northern Victoria, western Victoria and Gippsland.
The report found Victorian dairy farm profits in 2023-24 were above the long-term average for the fifth consecutive year.
In 2023-24, average profit was strong at $629,000 or $2.64 per kg of milk solids.
The varied seasonal conditions across the state for 2023-24 influenced performance and costs among the regions.
Average milk price fell slightly to $9.64/kg MS — a one per cent decrease on the previous year’s very high price — while total costs for the 2023-24 period remained stable.
Agriculture Victoria farm business economists program manager Claire Waterman said Dairy Farm Monitor participants produced more milk across the state and increased home-grown feed production for their herds, despite challenges including dry seasonal conditions in the south-west and a slightly lower milk price than last year.
“We thank the Dairy Farm Monitor project participants for their dedicated support to this initiative, providing such valuable information to industry and government,” she said.
Dairy Farm Monitor is a partnership with Dairy Australia, collecting and analysing financial and production data from dry-land and irrigated dairy farms in south-western Victoria, Gippsland and northern Victoria.
About 810 dairy farm businesses in northern Victoria produced 1.55 billion litres of milk in 2023-24, accounting for 29.2 per cent of Victoria’s milk production output and 18.5 per cent of Australia’s milk production.
In 2023-24, farm profitability in northern Victoria was influenced by a one per cent increase in average milk price to $9.93/kg MS and a four per cent decrease in total feed costs to$4.53/kg MS and a decrease in overhead costs to $2.86/kg MS.
The statewide average profit (earnings before interest and tax, EBIT) was $2.64/kg MS in 2023-24, the third highest in 18 years, accounting for inflation.
Profitability was mixed across the regions, with northern Victorian participants recording their highest profit, while south-west Victoria and Gippsland recorded their fourth and fifth highest profit, respectively.
Northern Victorian farmers were slightly more optimistic about the future than the state average.
Dairy Australia general manager research and innovation Greg Jarman said the Dairy Farm Monitor Project provided vital insight into the factors affecting the profitability and sustainability of dairy farms.
“The data and insights gained from the project assist farmers and service providers in decision making and support Dairy Australia and the Victorian Government by providing independent and reliable information to inform investment and resource allocation to priority areas,” Mr Jarman said.
“This ensures we maintain our focus on the projects and activities that will have the greatest impact on the long-term profitability and sustainability of the dairy industry.”
The 80 project participants represented a distribution of farm size, feeding systems and herd sizes.
There were approximately 2768 dairy farm businesses in Victoria, which produced 5.3 billion litres or 63 per cent of Australia’s national milk production, in 2023-24.
The 2023-24 Dairy Farm Monitor report is available on the Agriculture Victoria website.