IT was a who's who of the dairy industry at Hill End, Gippsland, last Friday, when the Australian Dairy Industry Council (ADIC) launched its Sustainable Farm Profitability Report.
The report's focus is the family farm and how Australia's dairy industry and producers can be integrated profitably and farmers can benchmark themselves against other farmers.
ADIC chair and dairyfarmer, Noel Campbell said apart from Tasmania, Australia's dairy industry was largely stagnant and the report would enable farmers to apply benchmarking and business management principles to grow their production.
This would help grow the industry. Growth was not without risk and the report helped farmers to understand how to mitigate risk, he said.
The report was launched by State Upper House Member for Eastern Victoria, Daniel Mulino, deputising for Agriculture Minister, Jaala Pulford.
"Victorian dairy farms contribute 85 per cent of Australia's dairy exports and Asia is a huge opportunity but we need to identify how to market ourselves in a global marketplace," Mr Mulino said.
"The complexities of profitability are daunting and this report lays out how to manage finances properly, to be sustainable in the long run and take advantage of opportunities."
Mr Campbell encouraged dairyfarmers to seek sound business management advice from others with a proven track record in wealth creation.
"Australian dairyfarmers need to be business focussed," he said.
"No two of our farms are the same which is why there is no silver bullet to achieve farm profitability.
"All dairy farms are small businesses; and we need to start thinking like the people who are running other small businesses, like coffee shops, for our own and our industry's benefit.
"Unlike coffee shops, dairyfarmers are not competing against each other and if we are doing something well and increasing production, we need to share that knowledge.
"We want dairyfarmers who are prepared to overcome challenges and grab opportunities as they arise.
"Drought, flood and the value of the dollar are out of our control.
"Dairyfarmers can control the cost of fuel, feed and electricity and learn best practice methods from other dairyfarmers to adopt for their own business management.
"This report tries to take the factors that are out of our control and seek to inform farmers how to reduce costs and still make more milk."
The report provides a baseline for dairyfarmers to identify areas for improvement and for the industry to achieve integration and profitability.
During a period of three years, 56 farms were studied – and while two-thirds of those farms were in the top tier of farm profitability for at least one of those years, only 13 per cent were consistently high in all three years and 11 pc were consistently low.
"There is enormous variation in profit performance across dairy farms," Mr Campbell said.
"Farmers need to be able to manage risk as well as performance to achieve profit.
"Debt is a driver of improving business performance. Many young farmers have significant levels of debt and they are looking for best practice ways to perform better and remain in business.
"I think Australian dairyfarmers have been behind the rest of the world when it comes to using benchmarking scenarios.
"If our industry is going to be profitable in the next decades, we'll need to have new entrants who want to drive profitability."
Labour efficiency was a challenge for the industry.
"Milking facilities, the type of grazing or supplementary feeding systems and a stable and skilled workforce are all characteristics of farms with high labour efficiency," Mr Campbell said.
