Key Trends

The dairy industry within the Murray Dairy region had been continuing to recover from a decade of dry conditions which saw milk production drop from its peak of over 3.0 billion litres in 2001 – 2002 down to 1.7 billion in 2009 – 2010 and up to 2.36 billion in 2014 – 2015. However with dry conditions throughout the 2015 - 2016 season, milk production dropped to 2.26 billion litres. It is anticipated that milk production will be further impacted over the coming period as a result of reduced milk price impacting on the industry.

There has been a continuing trend of reducing farm businesses with over 3,000 in 2001, to approximately 1500 today. According to stakeholder tracking data May 2015, there was a trend towards planning for growth, however according to stakeholder tracking data February 2016, farmer confidence has dropped by 30%, and the likelihood for growth is expected to be lower over the next two to three years.
                      

 

 
Government policies, climate change and increasing competition continue to drive change in water availability and reliability. As is market volatility, combined these factors are impacting on industry productivity and the stability of regional milk production.

The response at a farm level has been an emergence of a range of dairy farming systems with a greater ability to adapt decision making in response to either seasonal, policy and/or market pressures or opportunities. Most noticeably has been an increasing shift away from perennial pasture based farming systems, which has historically been the preferred low cost input system whilst irrigation water availability and cost were stable. Farming systems across the Goulburn Murray Irrigation District and Southern NSW regions are now mixed in forage type and incorporate a degree of flexibility in forage source which includes either home grown, contracted or brought in depending on the associated assessed risks. Decisions are predominately being
driven by the fluctuation in water availability and price. The exception being the North East region which remains predominately a rain fed, low cost input system and has seen continued growth in milk production over a number of years.

The need for farm system change is emerging as the key issue and priority across the region. Ultimately the ability for the industry to remain profitable and sustainable will depend on the capacity for change and the skills and capability of both farmers and the service sector to drive adaptation in farm businesses, across the region.