Victorian dairy farmer exits remain high but others thinking about joining the industry

In East Gippsland, Matt Wilson and his family will make the move to return to a culinary career after 13 years in dairying.

Mr Wilson said he had a "full-circle" moment after working as a chef for 15 years before he moved into dairying in 2010, and would exit the industry in spring.

He grew up on a beef and pigeon farm that was surrounded by dairy farms, and had always been fascinated by the industry.

"It's been tough, I love farming and I love milking cows, I just find the financial reward for the amount of work that you're doing is probably not as good as it should be," he said.

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Mr Wilson said he wanted to move back into a career where he believed he could spend more time with his partner and two children, and have a stable income.

"If we can get this going, there's no reason why we can't turn over similar amounts of money than what we were doing milking cows," he said.

"To set us up doing this [The Untethered Chef business] cost us $50,000, but to set ourselves up on the dairy cost us $750,000.

"I made financial decisions and I made some wrong ones and I probably over-extended myself which made it tougher.

"But again, we should be able to build our business and do those things, the last 13 years have been quite tough and the past three have been completely different.

"In that situation I was so lucky to have Jim [Watson] because that meant we could get work done, but if I didn't have him I don't think I would've still been in the industry."

Jim and Jenny Watson, Poowong, share farmed with Mr Wilson and decided to exit dairy after 60 years' commitment to the industry to run beef.

Mr Watson said he believed the instability of returns, lack of labour and input costs all contributed to a rise in dairy farmers exiting the industry.

"While the downturn affected us, we weren't affected by the claw-back which disillusioned a lot of people in the industry," he said.

"It absolutely shattered people - particularly young people - who were establishing themselves and had borrowed up to their neck."

He said he previously milked about 300 cows and now managed up to 300 steers.

"I left school the day I could get out of school, I always wanted to be a farmer, there was never any question about that at all," he said.

"The disillusionment came in the last couple of years of dairying, it just wasn't going to work."

Mrs Watson said farmers needed to look after themselves first.

"Farm ownership is not necessarily the be-all-and-end-all, if you really want to be in dairy it's best to go down the share-farming route and let someone else worry about that debt, or go into management," she said.

They said their message to all farmers would be to look after themselves and their mental health.

Mr Wilson said the biggest reason he decided to return to a culinary career was because he knew he would be unable to buy a farm.

"At the end of the day, it feels like every cost in the dairy industry is huge," he said.

"It seems like there's so many people involved in the chain of where it gets to, everyone takes the pie and the farmer gets what's left at the end, and there's almost the attitude of 'it doesn't matter, they'll be fine'."

Dairy Australia industry insights and analysis manager John Droppert said the organisation's Australian Dairy in Focus Report showed farm numbers had dropped by an average 4.5 per cent each year over the last 20 years.

"The average has been closer to 5pc over the past six years since the milk price step-downs in 2015-16, but has ebbed and flowed year to year," he said.

"This is partly due to the way the data is recorded but also reflects different phases of farm exits.

"In 2016-17 and 2018-19 for example, financial pressures and drought in 2018-19 hastened the exits of affected farmers, whilst more recently, 2020-21, exits have been higher due to strong land values and beef prices, which have encouraged farmers to realise the capital gains in their assets."

Mr Droppert said cow numbers had fallen by 2.3pc a year on average and milk production by an average of 1.4pc each year.

Farm labour numbers decreased by an average of 3.3pc each year over the same period, which is fewer than the average fall in farm numbers, but more than the average decrease in milk production.

He said insights from Dairy Australia's survey work showed that most dairy farms exiting the industry had transitioned to beef.

"This could have been influenced by a number of factors such as beef prices, labour issues or a desire for reduced workload," he said.

"The trend is apparent across all regions."

Mr Droppert said the greatest number of exits were small herd businesses that had less than 150 cows.

"Overall, age or retirement is the dominant reason for exiting and is the main reason for the number of small farm exits, along with workload considerations," he said.

Dairy Australia's data tables don't include the current season, but Mr Droppert said milk production was expected to finish down 4-6pc compared to 2021-22.

He said influences included ongoing farm exits, workforce and weather-related constraints, but the gradual easing of workforce shortages were likely to influence more stable farm labour.

Meanwhile, Neerim East farmers Trevor and Sophia Stammers and their two children are entering the dairy industry with a 20-year goal, and will take on Mr Wilson's herd.

They started with a beef farm and were working towards purely Angus, but Mr Stammers said he saw financial reward and stability in entering the dairy industry.

"It's going to be a tough road, a lot of people are getting out so I see there's a great demand for milk suppliers," he said.

"My pop, uncle and cousins were all dairy, but my uncle and aunty left dairy at the start of last year and my cousin up the road is getting out at the end of this year, so there's two Stammers out in the past two years and one Stammers in."

He said he had always loved the dairy industry and looked forward to being part of its community.

"I've always had a feeling of doing it and just had the opportunity to have family support to take the step," he said.

"Everyone gets behind each other and the community is there to help each other out because we know how much work there is to do, and the support that the industry has.

"We're starting with a clean slate."