NEW research into Australian dairy farm profitability has found farmers need to have a strong focus on feed production for each dollar of investment.
Research papers released by Dr Jon Hauser of Xcheque and farm business consultant Neil Lane have highlighted how feed productivity remains the key to farm profitability.
Dr Hauser said farmers need to focus on pasture management and achieving as much as possible from their resources to produce profit.
“Our analysis shows the importance of maximising feed production from your available land and water assets. The top 25 per cent of farmers are almost universally getting more feed per dollar invested,” he said.
“We believe the industry should be focused on feed production per dollar of investment rather than a specific industry target for tonnes per hectare. Individual farm feed productivity will vary according to factors such as water availability and quality of land.”
Mr Lane said management of stocking rates, paddock rotation, and pasture residuals were the keys to success.
“We’re more likely to see wastage through under grazing in the spring and suppression of regrowth by overgrazing in the summer and winter – both result in a reduction in potential pasture harvest”.
The research paper is the final chapter in a comprehensive industry economic review compiled by Dr Hauser and Mr Lane.
The review examined the Australian dairy industry’s economic performance and provided a pathway to improve on-farm profitability.
Dr Hauser and Mr Lane based their research on the published Dairy Farm Monitor project data from 2006-07 to 2019-20.
This comprises 1741 annual farm datasets from most Australian dairy regions.
The analysis was carried out using Xcheque’s OurFarm.app farm business software tools.
Mr Lane said the research re-confirmed the vital importance of the true cost of feeding, including the capital cost of the land.
“The clear message is that farms give themselves the best chance of being profitable by lowering the cost of feed for per unit of production out the door,” he said.
“Feed cost is about feed management. This is one of the most important things for farmers to focus on every day.
“If you’re an intensive grazing system, good grazing management is critical – maximise quality growth and minimise wastage. Those running farm systems with a lot of supplementary feeding must think about how they provide that feed to cattle, maximise crop yields and minimise wastage during storage and feeding.”
Dr Hauser said lower rainfall, summer temperatures, and more variable weather conditions made low-cost pasture-based feed production more challenging in some parts of Australia.
“It is important to understand that Australia is not a ‘one size fits all’ dairy industry. Successful farmers adapt to the climate, the feed and water resource available to them, and the market they sell their milk into.
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