One of our surveyed south west Victoria farmers in the Dairy Farm Monitor Project (DFMP) has told us how the improved conditions returned their business back to black in 2019-20. The more consistent rainfall supported higher pasture and conserved fodder yields to increase milk production per cow than the previous year. Their farming business has been investing in irrigation systems and upgraded machinery with a focus on feeding as much pasture to the cows as possible. This combined with easing price of supplementary feed and improved milk price, helped them achieve the largest profit performance in 2019-20 since joining the project 10 years ago.
The farmer commented that they are not standing still and that what they did when they first entered the project is very different to how they operate today. Part of the refinement has come from participating in DFMP where it has given them objective set of figures to evaluate their performance and identify areas for improvement.
Across the 25 surveyed farms in south west Victoria, farm profit on average improved from the previous year. Average profit as measured by earnings before interest and tax was $382,000 per farm equivalent to $1.83 per kilogram of milk solids (kg MS), compared to $150,000 per farm or $0.71/kg MS in 2018-19.
- Farms in south west Victoria capitalised on favourable seasonal conditions to harvest greater quantities of homegrown feed than the previous year, and above the long-term average for the region.
- Milk production increased to 516 kg MS per cow, compared to 492 kg MS/cow the previous year.
- Greater quantities of fertiliser were applied than the previous year, and 75 per cent of farms increased their feed inventories.
- Expenditure on repairs and maintenance increased as healthier cashflows were available for deferred upgrades as well as capital purchases and reduce debt.