By Kirra Grimes
DESPITE a continuing decline in confidence among the nation’s dairy farmers, South Gippsland farmers are optimistic that their own businesses have a solid future.
Dairy Australia released its latest Situation and Outlook Report last week, with survey data showing that only 47 per cent of dairy farmers feel positive or very positive about the future of the industry; down from 53 per cent last year and a peak of 75 per cent four years ago.
The report also found that, across Australia’s dairy regions, the number of dairy farmers making plans to leave the industry has increased from 10 per cent in 2014 to 20 per cent in 2018.
But local dairy farmers Damian Murphy and Tim Jelbart remain optimistic about the future of agriculture in the area and say the current feeling among South Gippsland farmers is more positive than in other parts of the state, thanks to higher rainfall and higher opening prices from milk processors Burra Foods, Saputo and Fonterra.
“I don’t know of anyone who’s left the industry,” says Damian, who milks 280 cows on 100 hectares at Dumbalk and serves as secretary/treasurer of the Victorian Farmers Federation (VFF) South Gippsland branch.
“I still believe the dairy industry has a bright future and trust in my ability to grow my asset and be profitable,” he said.
Tim recently took on an 800-hectare farm at Leongatha South after the passing of his father and industry leader Max Jelbart, and while he agrees with Damian that the past couple of years have been tough, with tight cashflow and loss of trust in processors, he said he stays positive by looking at the bigger picture.
“Across the industry, we’ve seen low to no returns in the past few years, but I’m pretty proud of the family business, and I see a long-term future in dairy. The longer-term returns will be there, it’s just a matter of getting through the low milk price years.”
Tim’s farm supplies to Saputo and he says the recently announced $5.75 opening milk price for next season was a welcome improvement on the last couple of years.
“It’s not a top end price but it’s above the cost of production and given what we’ve had the last couple of years, it’s ok. It’s much better than where we have been.
“We were expecting a little bit higher but the key is it’s an opening price, so there’s room to move,” he said.
Damian, like 17 per cent of Australian dairy farmers, recently switched processors. He’s now supplying to Parmalat, after three generations of the Murphy family supplied Murray Goulburn.
Damian describes Saputo’s opening price as “below par,” but is unconvinced a mandatory code of conduct for dairy processors, as recommended by the Australian Competition and Consumer Commission earlier this year, would improve future prices for farmers.
“We’re 12 months into the voluntary code and I think we all agree it needs strengthening and an independent umpire for dispute resolution.
“Without the whole supply chain (supermarkets) under the code, I’m not sold this is the way to go, and the less we have the slow sticky fingers of government involved in the future of the dairy industry the happier I am.”
Tim and Damian agree that as older farmers look towards retirement, it will be vital to attract a new generation to the dairy industry, and that as well as ensuring a fair milk price, more needs to be done to improve the industry’s image and to educate existing farmers about important, future-focused topics such as succession planning.
“People see the industry as tough and not much of a life. Like you can’t get away from the farm, and that’s pretty confronting for young people,” Tim said.
“They’re also seeing better paying jobs in the city and they’re not wanting to work on dairy farms because of the low returns.
“At the end of the day, better farmgate milk prices will drive people to stay and invest in the industry,” he said.
“We need a profitable industry built on trust where there is reward for effort which will help the image of the dairy industry,” Damian said.
To read the full June 2018 Dairy Situation and Outlook Report, go to www.dairyaustralia.com.au/industry