Report to strengthen farm profitability
Posted on Sunday, July 19, 2015 - Category: In the News
A new report on the Australian dairy industry has identified efficient input use, strict cost control and sound management skills as the key areas of focus that can help all dairy farmers achieve better profits.
Commissioned by the Australian Dairy Industry Council (ADIC) and produced by Dairy Australia, the Sustainable Farm Profitability Report examines farm business profitability, pinpointing key drivers of successful dairying businesses and highlighting long-term strategies for success within farmers’ control.
Launching the report on Gippsland farmers’ Aubrey Pellet and Jaqui Morrison’s property on Friday July 3, ADIC Chair, Noel Campbell said that by benchmarking profitable and less profitable farms against one another the report would help identify areas for improvement on farm.
“Farmers may not be able to control the hike of electricity, fertiliser and fuel costs, which continue to squeeze margins,” Mr Campbell said.
“We can however control how well we use these inputs to control the costs which have a major influence on their bottom line.”
Macro drivers outside the farmer’s control, such as weather events, milk price volatility and government policy are put aside to provide a focus on the aspects of tactical efficiency, management capability and tactical flexibility decisions that farmers can make, to deal with risk and volatility.
Focusing on these elements under farmers’ control, the report highlights that every operation, big or small, has areas where it can improve to safeguard its profitability. No two of these farms are the same, which is why there is no “silver bullet approach” to profitable dairy farming.
Mr Campbell said that by using the resource document of tactical, strategic management guidance in conjunction with other resources, such as the new DairyBase tool from Dairy Australia, it was hoped that farm profitability could be lifted across the board.
Victorian Parliamentary Secretary for Treasury and Finance, the Hon. Daniel Mulino MP, officially representing Minister for Agriculture the Hon. Jaala Pulford at the event said that Government was keen to work with industry to ensure the future sustainability and profitability of the industry.
“We are committed to working with Australian Dairy Farmers, Dairy Australia and key dairy stakeholders to ensure this critical industry is focused on sustainable, profitable growth, and that farmers are supported to better understand their financial situation and to build financial flexibility to deal with volatility.”
To read the full Sustainable Farm Profitability Report click here.
ADIC Chair, Noel Campbell with Vic Parliamentary Sec. For Finance and Treasury, Daniel Mulino, Federal Member for MacMillan, Russel Broadbent, Baw Baw Shire Council Member, David Balfour and Director of Gardiner Foundation, Bruce Kefford. Photo courtesy of Jeanette Severs.