The annual Dairy Farm Monitor report has revealed that in 2022-23 Victoria’s dairy farmers experienced the best financial returns since the project began 17 years ago. Despite this, Australian dairy production was also at the lowest levels since 1994.

The Dairy Farm Monitor Project is a collaboration between Agriculture Victoria and Dairy Australia, and is an in-depth annual report tracking 80 dairy farm businesses statewide.

Agriculture Victoria Sector Development and Services Executive Director Dougal Purcell said the report showed that in 2022-2023, milk price increased by 33% to $9.77 per kilogram milk solids – the highest on record in 17 years – helping to offset rising feed costs and overheads including labour.

‘It is pleasing to see Victorian dairy farmers come out on top following a year of higher business inputs, wet conditions and flooding,’ Mr Purcell said.

‘We thank the Dairy Farm Monitor project participants for their dedicated support for this initiative, providing such valuable information to industry and government.’

Agriculture Victoria’s Dairy Farm Monitor project is a partnership with Dairy Australia, collecting and analysing financial and production data from dryland and irrigated dairy farms in south-western Victoria, Gippsland and northern Victoria.

Dairy Australia, General Manager for Research & Innovation Greg Jarman said farmers are making multiple operational and tactical decisions on a daily, weekly and seasonal basis.

‘Some of these decisions can have a lasting impact on the profitability and sustainability of their farm,’ he said.

‘The Dairy Farm Monitor Project is a valuable source of independent physical and financial data around a wide range of on-farm practices, equipping farmers with essential insights to inform their decision making. This information also ensures that on-farm consultants and industry stakeholders can use reliable, independent and useful information and resources to provide good advice to farmers.’

Project participants represent a distribution of farm size, feeding systems and herd sizes.

Farmers use the reports for business decision making, tracking performance of their business over time, making large scale changes and assisting with financial management.

Valued at $2.5 billion, Victorian dairy leads the nation’s exports. The gross value of milk produced in Victoria is worth $2.86 billion and the sector supports almost 13,000 jobs, almost half of which are in regional Victoria.

There were approximately 2,773 dairy farm businesses in Victoria that produced 5.14 billion litres or 63% of Australia’s national milk production in 2022-23.

Australia’s total milk pool dipped to just over 8.1 billion litres last year, a low not seen since 1994, and in stark contrast to the almost 12 billion litres it peaked at 20 years ago. The first quarter of this season has seen a slight uptick in milk production, but only when compared to last year. According to ABARES Australian milk production is expected to increase by 1% to 8.2 billion litres in 2023–24 as higher milk yields slightly outweigh a smaller dairy herd. This expected increase is due to the drier winter eastern Australia has experienced, with improved pasture quality and cow health.

However, the biggest determinant on where the figures land will be how the south of the state fares through late spring, summer and early autumn. If quality hay and grain remains expensive and conditions hot and dry, milk production will be hampered.

The 2022-23 Dairy Farm Monitor report is available on the Agriculture Victoria website.