Dairy Farm Monitor Project – Tasmania Annual Report 2015-16

Dairy Australia Limited

Type: Report
Knowledge level: Introductory

Farm Table says:

A great summary of dairy industry performance in Tasmania for 2015-16.

Summary

In 2015−16 the data obtained from 29 farms in Tasmania revealed average whole farm earnings before interest and tax (EBIT) of $246,639, a 48% decrease compared with the previous year. The average gross income was lower by 12% while the cost of production was 4% higher in 2015−16 compared with 2014−15. Milk sales increased slightly from 924 kg MS/ha in 2014−15 to 936 kg MS/ha in 2015−16. Return on assets was 3.9% compared with last year’s 7.8%.

This is the third year of the Dairy Farm Monitor Project in Tasmania. The project aims to provide the Tasmanian dairy industry with valuable farm level data relating to profitability and production. In 2015−16 dairy farm profitability declined for the third year in a row mainly as a result of a further decrease in milk price. The average EBIT was $246,639 signalling a 48% decrease from $478,462 the previous year. Net farm income also reduced by 67% from $380,643 in 2014−15 to $125,129 in 2015−16.

Of the 29 participants, 26 recorded a positive return on assets (RoA) with the average being 3.9% and the range was −3.5% to 10.8%, and the top 25% achieving 8.9% RoA. Although there was a significant decrease in the average return on equity, 23 participants had positive return on equity. The average RoE was 0.8% in 2015−16 while the top 25% group had a RoE of 13.5%.

The average milk price received in 2015−16 was $5.55/kg MS, a 10% decrease from $6.19/kg MS in 2014−15. The milk price decrease occurred towards the end of the season which meant that most decisions for the season were based on receiving a higher milk price.

The average cost of production increased by 4% from $5.02/kg MS last year to $5.24/kg MS this year. The average cost of production for the top 25% was lower than the average at $4.67/kg MS, which was only a 3% increase from $4.54/kg MS last year.

Farmers sold slightly more milk solids per hectare, from 924 kg MS/ha in 2014−15 to 936 kg MS in 2015−16. However, there was a slight decrease in milk sold per cow from 447 kg MS/cow in 2014−15 to 444 kg MS/cow this year. Average milk fat was 4.5% and milk protein was 3.6%, both a 0.1% increase on the previous season.

Whilst it was climatically a challenging season, good autumn rainfall helped to achieve an increased pasture consumption of 10.7 t DM/ha compared to 10 t DM/ha in the previous season. Sixty-nine percent of energy in the cow’s diet came from home grown feed.

There was a greater level of uncertainty regarding business returns for 2016−17 than expressed in previous years’ surveys. This was not unexpected given the milk price and seasonal challenges experienced in 2015−16.

Milk price was again identified as the main issue of concern for the short term (12 months) and longer term (five years).

2017 - Australia - Dairy Australia Limited
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