Investment opportunities

Facts and figures

  • Some 1,500 dairy farmers in western Victoria are expected to produce 2.0 billion litres of milk in 2009/10.
  • This represents 23% of national milk output.
  • The dairy industry directly employs around 7,400 people in western Victoria, in both farming and processing.
  • Dairy companies manufacturing product in the region include Fonterra, Murray Goulburn and Warrnambool Cheese & Butter factory and National Foods. A number of other dairy companies have suppliers in the region.
  • The estimated value of farm gate production in the region in 2009/10 is approximately 687 million.
  • Over half the farmers in the region (58 per cent) undertook some capital investment in 2009/10 a lower proportion than the 70 per cent in the previous year.

 

South West Dairy Industry key facts

  • Farms in western Victoria milk an average 281 cows, producing an average 1.76 million litres, or 131,735 kg of milk solids (fat and protein)
  • The average dairy land area per holding is 179 ha
  • Average grain usage increased from 1.3 tonnes to 1.35 tonnes per cow, per year.
  • Of the respondents surveyed, 86 per cent typically purchased grains and supplements as required
  • Over the past year, 22 per cent of herds did not graze pasture for a period of time. This is a significantly lower proportion that the 35 per cent during 2008/2009.
  • The most common production system in the region is seasonal calving (63 per cent) of farms. Some 31 per cent of farms use split or batch calving, whilst 6 per cent describe their herds as 'calving all year around'

source: Dairy 2010 Situation & Outlook: A snapshot of the dairy industry in Western Victoria

 

Milk Production Outlook - 2010/11

  • Production in the region is expected to ease by 0.5 per cent
  • Almost half of respondents (46 per cent) are expected to increase their milk production, while 7 per cent plan to reduce their production.
  • An average 23 per cent of the herds in Western Victoria will comprise heifer introductions, with 74 per cent plan to reduce their production
  • Just over half (51 per cent) of farms expect to be producing more milk in three years time, whereas 39 per cent of farmers will have production at about current levels
  • 5 per cent of farmers do not expect to be in business in three years time.

For a full situation and outlook report, or for the latest industry statistics, visit www.dairyaustralia.com.au.

 

Regional Opportunities & Challenges

Advantages

  • Inherent advantages of the region are based on the dryland pasture base and relatively reliable seasonal climate.
  • The availability of significant manufacturing infrastructure in the region.
  • There are few limitations on feed supply, with good access to fodder and grain supplies.
  • Strong competition for milk supply between companies due to the perceived long-term opportunities for production growth.
  • Access to a network of farm advisers and extension resources.
  • There is potential for conversion of beef and sheep farms to dairy production.
  • There is land available for lease within the region
  • There is flexibility for farmers within the region to adapt cow feeding systems, depending on the season and the supply of feed.

Challenges

  • Land values have risen appreciably in recent years due to dairy competition, and to a lesser extent to land use pressures from tree crops and other livestock industries, as well as growing levels of investment from lifestyle rural investors.
  • Increasing values of land present a barrier to new entrants and farm expansion.