Costs worry SW dairy farmers

Despite improvements in the outlook of South West diary farmers, some remain concerned about the future of the industry, claiming input costs are still too high.

Dairy Australia’s commercial research and analysis manager Norman Repacholi said half of the region’s dairy farmers felt positive about the industry, which was up by a third on the initial national survey held in February.

“The main reason for the improvement is the rise in milk prices,” he said.

“However some are saying the milk price is not enough and that it has remained static.

“In some cases the situation hasn’t improved as much as they would like because their input prices are still high, which has affected their profitability.”

Harvey dairy farmer and WAFarmers dairy section president Phil Depiazzi agreed there were mixed feelings among farmers in the region, but most were positive about the future.

“I would suggest that most of us are doing pretty well at the moment,” he said.

“The overall feeling is more positive compared to where we were two years ago.

“We have had a slight increased in price, which has made most people more confident going forward.”

Looking towards summer, Mr Depiazzi believes the farmers are in a good position to remain self sufficient for feed through the hardest season.

“The spring rain will help through summer because we will be able to produce more hay and not have to buy it, which will help our bottom line and reduce the input costs,” he said.

Mr Depiazzi said the biggest input cost was grain, which this year looked more promising because of the higher crop yields.

“Any reduction in grain price would be a significant help and makes our business more viable,” he said.

The survey also revealed 47 per cent of dairy farmers were planning on capital expenditure and 60 per cent planned to increase production in the next three years.

Mr Depiazzi agreed some farmers were looking to expand, especially where farmers had retired and the younger generations were looking to move in.

“It’s a step in the right direction, with some looking to expand their business or start new dairies,” he said.

“There are a few who want to get out, which allows the younger farmers to pick up the slack.”