Dairy Food Safety Victoria: Farm licence numbers decline

Victorian dairy farmers are enjoying record prices. But new figures show more are still leaving the sector.

VICTORIA’S dairy farm numbers continued on a downward trajectory last financial year, despite farmgate prices galloping to record riches in the 2022-23 season.

New figures released by Dairy Food Safety Victoria (DFSV) confirmed there were 3027 bovine dairy licences operational in the 2021-22 financial year, down from 3088 in the 2020-21 season.

The new licence data means more than a third of all Victorian dairy farmers have left the sector in the past decade.

During the 2011-12 financial year, 4556 bovine licences were operational statewide, with the biggest year-on-year decline occurring in the wake of the 2016 price clawbacks by Murray Goulburn and Fonterra.

United Dairyfarmers of Victoria president Mark Billing said the latest DFSV numbers were unsurprising following a number of volatile seasons.

“There’s been a decline in the number of dairy farms, not just in Victoria but across Australia, for more than a decade now,” he said.

“The years after the clawback were tough, there’s no two ways about it. Many farmers left dairy and went into beef or plantations. It set in a medium-term trend that’s only just now slowing up. In the coming two to three years, we’ll likely see those numbers stabilise if there’s the stability of pricing that goes with it.”

More than a third of all Victorian dairy farmers have left the sector in the past decade. PICTURE: ZOE PHILLIPS

Mr Billing said labour shortages and inflationary pressures from fertiliser and electricity presented challenges for primary producers this financial year, despite record prices paid at the farmgate.

“It’s not just a case of having a great farmgate price. If much of that profit is being eaten into by input costs, you’re back to square one,” he said.

The DFSV annual statement was one of dozens of audits and annual reports released by the Victorian Government last week, five days out from Christmas.

During the 2021–22 financial year, DFSV issued 47 new licences across all categories, which was 21 per cent fewer than the previous year.

The dairy farmer category experienced the biggest reduction in new licences issued, with 23 per cent fewer.

Total reported milk production also decreased slightly compared to the 2020-21 financial year, with flooding in northern Victoria already biting earlier this calendar year.

Overall, manufacturer licence numbers remained relatively steady in 2021-22, with a slight decrease compared to the previous financial year.