Dairy Food Safety Victoria confirms slight growth in farm numbers

New figures released by Victoria’s milk industry regulator have surprised industry veterans.

Victoria’s dairy farm numbers have made a surprise bounce-back in the past financial year, but industry veterans are approaching the development with caution.

Dairy Food Safety Victoria has confirmed there were 2812 farmer licences statewide last financial year, a slight increase of 16 from the 2796 licences in 2022-23.

Confirmed in the DFSV annual report this week, the slight uptick is the first net growth in dairy farm licence numbers since 2015-16 when there were 4141 licences across Victoria, up 14 on the 2014-15 tally.

The 2015-16 financial year coincided the Murray Goulburn/Fonterra clawback of farmgate prices, which set in motion nearly a decade of decline in farmer numbers.

Shepparton region farmer Geoff Akers said it was a surprising statistical development, potentially reflecting the previously strong farmgate prices.

“What makes it all the more surprising is that there would be a net gain. If there’s a slight increase, it means the number of farms being added is offsetting those departing,” he said.

“In order for that to happen, you’d have to add about 10 to 15 new farms in each of the three dairy regions. I haven’t seen a noticeable increase in farms shifting to dairy, so maybe there are other factors at play.”

Gippsland farmer Aaron Thomas said there had been a noticeable slowing of the dairy-to-beef farming trend that accelerated in the wake of the 2016 clawback.

“There were heaps of farms going from dairy to beef a few years back but that has slowed up,” he said. “It’s fantastic if things are stabilising with dairy farm numbers, that’s good news for the industry to have some stability after years of people leaving.”

With dairy farms expanding herd sizes in the 2000s and 2010s, the decline in farm numbers did not hit overall milk production until the mid 2010s.

Australia’s milk pool peaked in the 2014-15 financial year at more than 9.8 billion litres, with this season expected to clock in around the 8.3 billion litre mark.

Former Fonterra Australia Suppliers’ Council chairman John Dalton said the slight rise in Victorian farm numbers was a positive signal for the sector.

“There’s been some decline in numbers for a while, so to have that ease and even increase slightly is good news for dairy,” the retired southwest Victorian dairy farmer said.

“Confidence is key to attracting and retaining the next generation in dairy. Farmgate prices are part of that but there’s also issues like labour costs, insurance costs, electricity – that all factors into confidence.”

Every Australian state has registered declines in dairy farm numbers with the downward trajectory acute in Queensland — back in 1980, the Sunshine State boasted 3052 dairy farms Today, only 300 dairy farms are registered across Queensland.