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Legendairy Faces of Tasmania

 
 
 

A Snapshot of the Tasmanian Dairy Industry

Over the past 10 years milk production in the Tasmanian Dairy Industry has continued to grow at an average rate of close to 5%pa. There has been a 43% increase in production compared to a national decrease of 4%. Tasmania is the only State of Australia to show growth. This is based around sustainable farm management practices, efficient on farm production systems and a relatively favourable climate for pasture based dairy farming.


The Tasmanian dairy industry produced a record 891 million litres of milk off approximately 440 dairy farms in 2014/15. 2015/16 has been a challenging season with exceptional dry and warmer conditions. Tasmania now produces over 9% of the nation’s milk.

The Tasmanian industry has the potential to development further with a more effective cost of production, favourable climate and in continued access to water for irrigation, land for new dairy development and recent expansions in milk processing capacity . There is scope for investment in current dairy farms, for new dairy farm conversions and for additional processing capacity.

Recent investments by Murray Goulburn and Lion Dairy and Drinks have been significant for the industry and a number of smaller operators have also invested.

Each year, Dairy Australia surveys a proportion of Tasmania's dairy farmers as part of Situation and Outlook. This factsheet outlines the some of the results of the 2015 survey. For information on the latest report check the Dairy Australia website at http://www.dairyaustralia.com.au/Markets-and-statistics/Market-situation-and-outlook.aspx

The region's status

  • There are 440 dairy farms in Tasmania.
  • Total milk production for the region in 2014/15 was 891.4 million litres (up 10 per cent on last year). This is 9.2 per cent of national milk production.
  • The estimated value of farm milk production in 2014/15 from the region was around $430 million.
  • Rainfall in 2014/15 was below average for Tasmania but despite this, good pasture consumption was achieved along with a record state milk production
  • Milk prices are driven by the annual prices offered by Murray Goulburn and Fonterra which collects the majority of milk in the state. This drives prices offered by a number of other regional processors of cheese, processed dairy products and fresh dairy products.
  • Major companies operating in the region include Fonterra Australia, Murray Goulburn, Mondelez/Cadbury and Lion Dairy and Drinks. Milk is mainly used in cheese and powder production for export, as well as fresh dairy products.
  • The industry directly employs 1,500 people in the farm sector and 1,200 people in the processing sector.
  • Tasmania has a ryegrass dominant, pasture-based dairy industry with feeding systems ranging from very low input to high input systems. Peak pasture growth occurs in spring – for many farms this accounts for two-thirds of pasture growth for the season. Rainfall in Tasmania tends to be winter dominant.
  • Tasmania retains a seasonally based calving pattern with the majority of cows calved in spring but there are increasing numbers of farms that also calve some cows in autumn. Many Tasmanian dairy farms now use cross-breeding in their herds.

Tasmanian key points from the 2015 survey:

  • Tasmanian dairy farmers are still the mostly likely in the country to be positive about the future. However 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 somewhat lower.
  • Loyalty to the milk 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. 

Tasmanian Dairy Farm Monitor Report for 2014/15

  • This is the second year of the Dairy Farm Monitor Project in Tasmania with 30 dairy farms surveyed by Dairy Australia.
  • In 2014/15, dairy farm profitability declined compared with 2013/14 predominantly due to a lower milk price. The average milk price received in 2014/15 was $6.19/kg MS, a 10% decrease from $6.87/kg MS in 2013/14.
  • There was only a small change in the overall cost of production. The average decreased by 1% from $5.09/kg MS to $5.02/kg MS.
  • While expenditure on purchased feed and agistment costs increased, in particular a 9% rise in concentrates as farmers fed more per cow, overheads costs were less than in 2013/14. The cost of production of farms in the top 25% (ranked by return on assets) remained similar at $4.54/kg MS this year, compared to $4.54/kg MS last year.
  • Farmers sold more milk solids per hectare and per cow this year and although cost of production decreased slightly, this did not offset the effect of the lower milk price received this year.
  • Of the 30 participants, 29 recorded positive return on assets and return on equity, compared to 2013/14 where all farms recorded a positive return on both of these measures.