Australian dairy opening prices: Doing the hard yards with the Renyards

Nick and Will Renyard have revealed how much the opening price downturn will cost them, and other dairy farmers, in the new season.

Each dairy generation has its bull and bear seasons — for every bullish 2021, there’s a bearish 2016 ready to claw at the profit margins.

Nick and Will Renyard operate a multi-generational dairy farm at Curdievale in southwest Victoria and are strapping themselves in for a less profitable new financial year.

With the new season starting next week, most processors are offering between $7.80 to $8.30 per kilo milk solids, figures that Dairy Farmers Victoria estimates only cover the cost of production.

“It won’t be as bad as the years after clawback in 2016,” Nick says, “but it won’t be like the great seasons we’ve had in the past couple of years.

“Every dollar per kilo that comes off the price that’s about $320,000 to $340,000 coming off the farm income. It’s going to be a bit more than that for many farmers, given we’ve got a 14 per cent drop in the opening price that’s pretty universal, from the mid to high $9s (per kilo milk solids) to the low $8s.”

Will was a teenager at the time of the infamous 2016 clawback by Fonterra and Murray Goulburn. But time moves on, with MG allocated to the history books and Fonterra eyeing an exit from Australia.

“We’ve been expecting a drop in the price — but perhaps not as aggressive as it has been,” the 24-year-old farmer said.

While a dry autumn has created a green drought across much of southwest Victoria, the Renyard farm near Peterborough and Timboon has fared better than some other pastures further north and west.

“We’ve got a few levers we can pull- we’ve done a lot of repairs and we’ve had a few projects done in the past few years, so this season won’t have the level of investment.”