Australian Dairy Farm Numbers Drop Below 4,000 as Industry Exodus Accelerates
Source: DairyNews.today
Australia’s dairy industry has experienced a significant contraction, with the number of dairy farms falling below 4,000 for the first time in decades. A 6% decline during the 2023/24 financial year saw the total drop from 4,163 farms in 2022/23 to just 3,889, according to Dairy Australia’s latest In Focus report.
This marks a 38% reduction in dairy farms over the past decade, with the most dramatic declines occurring after the 2016 pricing clawback by major processors Murray Goulburn and Fonterra.
Economic Pressures Hinder Generational Transition
Waylon Barron, a Queensland dairy farmer and EastAusMilk board member, attributed the accelerating decline to a combination of economic and generational challenges.
“High interest rates and rising land prices make it increasingly difficult for young farmers to enter the industry, especially without generational backing,” Barron said.
While recent seasons have seen elevated farmgate prices, Barron noted that soaring input costs have eroded potential gains.
“Input costs like feed, fuel, and fertilizer have risen as quickly, if not faster, than farmgate returns,” he added.
Regional Disparities
Victoria, Australia’s largest dairy-producing state, has experienced the steepest declines. The state’s farm count has dropped by over 40% in the past decade, from 4,268 farms in 2013/14 to 2,552 in 2023/24. Despite this, Victoria still accounts for nearly two-thirds of the country’s dairy farms.
New South Wales ranks second with 452 farms, followed by Tasmania (342), Queensland (266), South Australia (170), and Western Australia (107).
Input Costs Outpacing Returns
Robert Brokenshire, president of the South Australian Dairyfarmers Association, highlighted drought conditions in South Australia and western Victoria as a key driver of rising input costs.
“Fodder is always a challenge during drought, but this year it’s compounded by higher electricity, labor, and regulatory costs,” Brokenshire said.
Farmgate prices in northern New South Wales and Queensland are among the highest in Australia, but weaker financial returns in other regions have hastened farm closures.
Outlook
The continuing decline in dairy farm numbers underscores the challenges facing Australia’s dairy industry. Rising operational costs, access to financing, and drought conditions are putting pressure on farmers nationwide, with younger entrants finding it increasingly difficult to establish themselves in the sector.
As the industry grapples with these challenges, support from financial institutions, policymakers, and industry groups will be critical to maintaining a sustainable dairy sector in Australia.
Economic Pressures Hinder Generational Transition
Waylon Barron, a Queensland dairy farmer and EastAusMilk board member, attributed the accelerating decline to a combination of economic and generational challenges.
“High interest rates and rising land prices make it increasingly difficult for young farmers to enter the industry, especially without generational backing,” Barron said.
While recent seasons have seen elevated farmgate prices, Barron noted that soaring input costs have eroded potential gains.
“Input costs like feed, fuel, and fertilizer have risen as quickly, if not faster, than farmgate returns,” he added.
Regional Disparities
Victoria, Australia’s largest dairy-producing state, has experienced the steepest declines. The state’s farm count has dropped by over 40% in the past decade, from 4,268 farms in 2013/14 to 2,552 in 2023/24. Despite this, Victoria still accounts for nearly two-thirds of the country’s dairy farms.
New South Wales ranks second with 452 farms, followed by Tasmania (342), Queensland (266), South Australia (170), and Western Australia (107).
Input Costs Outpacing Returns
Robert Brokenshire, president of the South Australian Dairyfarmers Association, highlighted drought conditions in South Australia and western Victoria as a key driver of rising input costs.
“Fodder is always a challenge during drought, but this year it’s compounded by higher electricity, labor, and regulatory costs,” Brokenshire said.
Farmgate prices in northern New South Wales and Queensland are among the highest in Australia, but weaker financial returns in other regions have hastened farm closures.
Outlook
The continuing decline in dairy farm numbers underscores the challenges facing Australia’s dairy industry. Rising operational costs, access to financing, and drought conditions are putting pressure on farmers nationwide, with younger entrants finding it increasingly difficult to establish themselves in the sector.
As the industry grapples with these challenges, support from financial institutions, policymakers, and industry groups will be critical to maintaining a sustainable dairy sector in Australia.
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