Dairy farm businesses are in a cost squeeze, and the global uncertainty due to the Middle East war is casting a long shadow across agriculture, while processors are preparing to make offers for the new season’s milk.
Some farmers, like Adam Spradbury from Cohuna, are opting to exit the industry in the face of cost pressures.
His issue has been around the cost of temporary water. For others it is increasing fuel prices, the cost of fertiliser and the difficulty of finding suitable labour.
While optimism in the Victorian Murray region has been higher than many other districts, in a national dairy farmer survey, the Murray region and New South Wales regions were the only areas where optimism about next year’s profits was lower than it was for 2025.
The latest Dairy Australia Situation and Outlook report found that most farms (85 per cent) report confidence that they had appropriate plans in place to navigate future challenges.
While this confidence is broadly consistent across regions, it varies by herd size. Confidence is lowest among small herds of fewer than 150 cows (78 per cent) and strongest among the largest farms (93 per cent).
The proportion of farms in an expansion phase has returned to 2022 levels, with just over a quarter of businesses (26 per cent) currently expanding and 38 per cent having increased their herd size in the past 12 months.
“Significant rainfall, including record highs in some areas, has somewhat eased water‑related pressures.
“This rain break has set up some farmers to sow crops. Instances of investment and expansion have tended to be by barn‑fed operations, a trend particularly notable within northern Victoria. Herd management initiatives such as increasing herd size and retaining heifers for another lactation could support milk production,” the report said.
“Farmers have struggled with below average rainfall and extreme water price pressure for most of the season. Furthermore, many farmers were subjected to the one‑two punch of bushfires leading almost immediately into heavy rainfall. Though cow losses were rare, there were cases of interrupted milk collection.“
Further story, see page 5.
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