A Dairy Australia survey has confirmed that half the dairy farmers in the Lower Murray Darling Basin are expecting to make a decision regarding continuing in the dairy industry before the end of the year.
Their decisions will be influenced by the amount of spring rain, irrigation water allocations and milk prices. While about three-quarters of dairy farmers feel negative about the future of the dairy industry in their local region, farmers had significantly more confidence in how their own businesses would fare in the next 12 months.
The survey is an input into the Lower Murray Darling Basin Inquiry which is looking at the factors shaping dairying in the region in the next five to ten years. In total 380 dairy farmers across 11 irrigation regions were contacted for the survey during August.
Dairy Australia Managing Director Mike Ginnivan said dairy farmers in the area are dealing with a number of simultaneous challenges.
Drought conditions, reduced irrigation allocations, a substantial drop in milk price and the escalation of input costs are combining with other key issues such as water policy and climate variability. This is having huge and rapid impacts on the way the future of this region is unfolding.
The survey revealed that almost one in five farmers has left the industry or is planning to. It also found that approximately 165,000 cows or 28 per cent of the region’s cows have been sold, culled or moved to cow parking or agistment over the past year. Of the cows being sold to other farmers, few have stayed in the region and have moved to other dairying areas.
The other trend we have noticed is that dairy farmers are planning to increase their sales of water entitlements. An estimated 58,320 megalitres were sold in 2008/09 (and 39,876 ML purchased) but projected sales of permanent water for 2009/10 are even higher at almost 120,000 megalitres, Dr Ginnivan said.
The Lower Murray Darling Basin inquiry was announced by Dairy Australia in May to give industry and the community a big picture view of the long-term factors impacting on dairying in the region to help them make decisions for the future.
As well as the survey, the inquiry is hearing from industry and community members through formal submissions and public meetings. An independent panel is completing the inquiry, expected to be completed in November.
Dr Ginnivan said that in view of the considerable stress many farmers are under, the participation rate in the survey was remarkable. Ninety-six per cent of farmers contacted were willing to respond to this survey. People are willing to talk about the issues and keen to share their plans and concerns and that is giving us better insight into exactly how people are managing in the region.
More information about the inquiry can be found at www.dairyaustralia.com.au/lmdb-inquiry