Dairy

Dairy industry in Victoria's Food Bowl

The Goulburn Murray Irrigation District (GMID) is part of the Murray Dairy Region which is one of the largest dairying regions supplying over 20% of Australia's milk production.

Australia exports about 50% of its dairy products and therefore the farm gate milk price is strongly linked to the world export market.

In such an environment, dairy enterprises in Australia need to be able to have a high level of cost control, achieve high productivity and have the appropriate risk management strategies in place to ensure long-term profitability.

The Murray Dairy region is uniquely placed in all three of these areas. The access to secure and reliable irrigation systems, relatively low land prices and the proximity to large grain and fodder growing areas provide sound dairy investment opportunities.

• The Murray Dairy
  Natalie Akers
• Research work
  Natalie Akers
• Competitive advantages
  Natalie Akers
• Dairy's Future with Drought
  Natalie Akers

Dairy Industry Value

In 2008/09, 1,940 dairy farmers in the Murray Dairy Region produced 2.1 billion litres, or 23% of national milk production. The estimated value of production at the farm gate was $979million.

In Victoria's Northern Irrigation region, dairy contributes 50% of the farm gate value of agriculture. The value-adding processing industries in the region add a further $3 billion to the economy, of which dairy contributes 55%. The value of the GMID's dairy industry for the 2005/06 year was estimated at $706.7 million ABS) which is broken down across the local government areas (see chart).

The principle GMID dairy farming areas include the northern and western parts of Greater Shepparton, between Strathmerton and Nathalia in Moira, around Lockington/Rochester and Stanhope/Tongala in Campaspe, and in the northern parts of Gannawarra and Loddon.

Dairy is a key driver of the job market. There are 16 dairy factories in the region and together, farm and processing, employ 8,415 people.

Competitive Advantages in the GMID

1. Grain & hay availability
Most of the Murray Dairy region is located within 100-200 km of major grain and hay producing regions. This is a key competitive advantage as it reduces the transport cost of supplementary feeds relative to other Victorian and Tasmanian dairy regions, while also providing feeding opportunities unique to the region.

2. Land purchase price
Farms in the Murray Dairy region on average have the highest productivity of all Australian dairy regions, but at the lowest initial capital requirement. Operational dairy farms can be purchased at common market prices ranging from $10 to $15 per kg of milk solids, depending on the level of development, location and soil quality.

However it is important to note that Australian dairy farmers commonly import 25% to 30% of their annual feed requirement in purchased grain and hay. In addition, Australian dairy farmers commonly do not rear young stock on the milking area, often either owning a 'turnout block' or using agistment. Therefore historical supplementary feeding levels and carrying of young stock need to be taken into context when comparing properties on a $ per kg of milk solids basis.

3. Climate
The region enjoys a true Mediterranean climate, with low humidity and high sunlight hours. The region has more sunny days than the Gold Coast in Queensland. The dry climate and low humidity allows for ease in cow management.

The dry climate means that laneways are easier to maintain and dealing with pugged paddocks is a rarity. Summers with low humidity provide practical management options such as providing shade and sprinklers in yards or feeding pads to combat high summer temperatures.

4. World class gravity-fed irrigation system being developed
The $2billion Northern Victoria Irrigation Renewal Project is creating a world-class irrigation system providing water security to ensure the region can continue to be prosperous and competitive. A modernised system will provide opportunities for farmers with new irrigation technology and methods ensuring on-farm water efficiencies.

5. Murray Dairy
The strength and service delivery of the peak regional industry group, Murray Dairy facilitates best-practice farming in the region by providing farmers with access to a wide range of information, best practice, toolkits and research.

Dairy Farming Options

The Murray Dairy region has traditionally been one of Australia's most productive dairy regions.

The resources available in the region allow for flexibility in the type of dairy farming system that can be employed. The region supports high-input systems to low-input systems, pasture-based to feedlot systems and seasonal calving to year-round calving, all of which have been demonstrated to be successful with the appropriate level of management employed. See resources available in the region chart (right)

Dairy Processors

The importance of the region to the dairy industry can be demonstrated by the fact that all of the major dairy companies in Australia have a presence. The major companies that are involved in on farm collection of milk in the region include:

The region provides a consistent reliable milk flow that is attractive to milk processors as they seek to match their milk flow with the needs of the market. Competition for milk supply is strong in the region, which gives farmers choice to whom they wish to supply.

The different companies offer alternative payment options that again allows for choice for farmers to select the best option that suits their particular farming system.