A new report has found Victorian dairy farm profits in 2023-24 were above the long-term average for the fifth consecutive year.
Dairy Farm Monitor is an annual survey tracking 80 dairy farm businesses statewide.
In 2023-2024, average profit was strong at $629,000 or $2.64 per kilograms 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 per kilogram milk solids — a one per cent decrease on the previous year’s very high price — while total costs for the 2023–24 period remained stable.
Milk income contributed approximately 91 per cent of gross farm income due to the strong milk price.
On expectations for profit, participants in each region had a weakening outlook for their business returns in the coming 12 months.
“With expectations for a lower milk price across most respondents in all regions for 2024-25, many farmers commented that they will focus on enterprise efficiency and reducing costs to negate the lower income (and dry outlook in the south-west),” the report found.
“Input costs, seasonal conditions and milk price were the highest ranked issues over the short and medium term.”
Compared to 2022-23, farm incomes fell due to a one per cent decrease in average milk price to $9.64 per kilogram of milk solids and a significant decline in livestock trading profits.
An increase in feed inventory in northern Victoria and Gippsland reduced costs in these regions, whereas most south-west Victorian participants drew down their fodder reserves to manage dry conditions.
Variable and overhead costs remained high and relatively unchanged on average for the state, compared to the previous year.
Northern Victorian participants on average had the most profitable year in 18 years. The average milk price in northern Victoria held steady, while costs were reduced, resulting in a healthy profit.
“Dairy Farm Monitor participants produced more milk across the state and increased homegrown feed production for their herds, despite some challenges, including dry seasonal conditions in the south-west and a slightly lower milk price than last year,” Agriculture Victoria farm business economists program manager Claire Waterman said.
“We thank the Dairy Farm Monitor project participants for their dedicated support to this initiative, providing such valuable information to industry and government.”
Dairy Farm Monitor is a partnership with Dairy Australia, collecting and analysing financial and production data from dryland and irrigated dairy farms in south-western Victoria, Gippsland and northern Victoria.
The 80 project participants represented a distribution of farm size, feeding systems and herd sizes.
There were about 2768 dairy farm businesses in Victoria that produced 5.3 billion litres or 63 per cent of Australia’s national milk production in 2023-24.