Victoria dairy farms hit hard: Latest figures paint grim picture
Victoria's top dairy farmers have seen their profits slashed by 73 per cent as drought conditions devastate the industry, with many others struggling to survive.
Drought has officially halved the profitability of Victoria’s top performing dairy farmers — but industry leaders say many more are battling to make ends meet.
Freshly released data from Victoria’s 2024–25 Dairy Farm Monitor Project found the average net farm income plummeted from $1.74 to $0.47 per kilograms of milk solids — a 73 per cent drop from the 2023-24 to 2024-25 seasons.
The long-running monitor of 80 farms across Victoria found the average earnings before interest and tax was cut from $2.64 in 2023-24 to $1.46 kilograms of milk solids — a 45 per cent reduction statewide.
Northern Victoria was the strongest performer out of the three dairy regions — thanks in part to drought conditions hitting later in the season — with an average earnings before interest and tax of $1.93 kilograms of milk solids last financial year.
Southwest Victoria and Gippsland, which have endured a longer dry spell, were both hit harder on the same EBIT metric, notching up $1.26 and $1.09 kilograms of milk solids averages respectively.
United Dairyfarmers of Victoria president Bernie Free urged ministers and bureaucrats not to use the data as an accurate reflection of dairy profitability.
He said Dairy Australia had acknowledged the Monitor Project was not a representative sample of dairy farmers, only an indicator of top primary production performers.
“It is important decision makers in government don’t base drought policy on these figures. Yes, profitability is down for Monitor Project farms but DA themselves have previously said it’s not a representative sample,” Mr Free said.
“Many dairy farmers in southwest Victoria and west Gippsland are battling to survive this drought and unfortunately this spring hasn’t been any kinder.”
The Farm Monitor Project is a joint initiative between Dairy Australia and Agriculture Victoria. Organisers say the project is intended as an industry snapshot rather than a forensic financial average for Victorian dairy operations.
Dairy Australia economics, data and insights head Helen Quinn said drought conditions led to the lowest amount of grazed pasture in Dairy Monitor history for the southwest region.
“It’s no surprise profits are lower- it was expected given the tough seasonal conditions with much of southern Victoria receiving its lowest rainfall on record,” Ms Quinn said.
“In southwest Victoria, profits fell by 48 per cent — from $2.40 to $1.26 kilograms of milk solids — that’s below the long-term average.
“In Gippsland, profits declined by 57 per cent — from $2.53 to $1.09 kilograms of milk solids. Northern Victoria was the most profitable region though they did have lower profits as well, decreasing by 34 per cent from $2.53 to $1.93 kilograms of milk solids.”
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