Dairy Farm Monitor Project confirms Tasmania as most profitable dairy state

Tasmania’s dairy farmers were the best paid across the industry in 2023. See the state-by-state breakdown.

Tasmanian dairy farmers eyed their milk cheques with glee in 2023 as new figures confirm the Apple Isle earned a dairy dollar distinction.

New figures from Dairy Australia outlined each state’s average farm earnings before interest and taxes (EBIT), with Tasmania on top, surpassing $1.6 million per farm.

South Australia also pushed past the seven-figure barrier at $1.18 million EBIT average per farm, followed by $817,627 in Western Australia, $691,162 in NSW, $616,995 in Victoria and $400,396 in Queensland.

The average farm profit figures were deduced through each state’s Dairy Farm Monitor Project during the 2022-23 financial year.

Dairy Australia industry analyst Eliza Redfern said the 2022-23 financial year was one of the most profitable for the sector in living memory.

However, she noted several regions — such as northern Victoria — also endured flooding which ate into the profit margins of inundated landholders.

“Every farm and farmer has different circumstances but the averages show the Australian dairy industry enjoyed record profitability last season,” Ms Redfern said.

“That profitability has carried over into the 2023-24 season, with strong farmgate prices again seen this year.

“Farmers that had to deal with floods or fires obviously had either part or all of their profit swept away by the costs associated with the damage, so these figures are an average and dependant on where the farm is located.”

Tasmania was top of the dairy pops. Picture: Zoe Phillips

Dairy Australia also provided an EBIT breakdown by cents per kilogram of milk solids, in what was one of the most profitable years for dairy since the 1999-2000 deregulation of the sector.

Tasmania was again the winner on the output measurement, notching up a $3.67 per kilogram milk solids EBIT – well ahead of the five other states.

Victoria performed better on this measure at $2.87 per kilogram milk solids EBIT average, behind South Australia on $3.08 during the 2022-23 financial year.

NSW farmers managed an EBIT of $2.78 per kilogram milk solids – despite farmers in the Premier State enjoying one of the best farmgate figures globally.

West Australian farmers collected an EBIT of $2.65 per kilogram milk solids while the figure was $2.53 in Queensland last season.

Dairy Farmers Victoria president Mark Billing said while strong farmgate prices were witnessed in 2022-23, the full impact of interest rate rises would be seen this financial year.

“It’s a good news story for dairy and good for confidence in the sector,” the Colac region farmer said.

“Country towns that service the dairy industry have also benefited – particularly farm machinery and supply businesses that get a direct benefit.”

In its final meeting of the year, the Reserve Bank board held the cash rate at 4.35 per cent, with experts tipping further rises in 2024.

Thirteen cash rate step ups have been signed off by RBA governors Philip Lowe and Michele Bullock since May 2022 due to galloping inflation.

“Farmers have been hit with more than dozen interest rate rises over last financial year and this current season, so we’re only starting to see the cumulative effects of that now,” Mr Billing said.

“I know from our own experiences that our repayments have doubled. That’s the story of many dairy farmers across the state.”