How dairy farmers are walking away from a family tradition
THE drought is more devastating to the dairy industry than dollar-a-litre milk, with one farm in NSW closing every week.
Last financial year 51 dairy farms closed across the state, according to Dairy Australia figures to be released next month.
Dairies in NSW are going bust at the fastest rate in more than a decade because farmers without water can’t grow pasture to feed their herds, forcing them to buy hay and grain at prices wildly inflated by the drought.
Farmgate prices for milk have actually increased by about 10 per cent this year but livestock feed costs have jumped between 80 and 100 per cent since 2017.
The monthly milk cheque is not covering costs to keep dairies afloat.
For farmers who survived the major supermarkets’ dollar-a-litre milk campaigns — selling homebrand milk for less than production costs to get shoppers through the door — and deregulation 20 years ago, the drought is the straw that broke the camel’s back.
Ads from auctioneers spruiking firesales are being emailed out every week, announcing another farmer who needs to sell their entire milking herd and machinery into a saturated market.
After a lifetime milking cows in the state’s southwest, dairy farmer Neil Campbell, 64, from Blighty, will walk off the land as soon as he can. The second-generation farmer, who bought the farm from his father in 1982, doesn’t know what he will do for a job once he sells all 530 Jersey and Friesian cows and two blocks of land.
“If I sell absolutely everything, which will be a challenge, I’ll walk away debtfree,” Mr Campbell said.
“After working 84 hours a week all my life I was planning on retiring in a few year’s time but there’ll be nothing left to retire on.”
For the past two years, Mr Campbell has not been allowed to access water he already paid for to irrigate his crops. For most farmers in the region, purchasing additional water on the open market is unaffordable. He spent $460,000 on livestock feed in the first six months of this year, which he would normally grow himself.
Since July last year, more than three trillion litres of water has washed past Mr Campbell’s farm, downstream to South Australia and out to the Southern Ocean as part of the Murray-Darling Basin Plan’s guarantees for environmental flows and South Australian farmers.
Even while NSW rivers and dams are running dry, water from the dwindling Hume and Dartmouth dams near Mr Campbell’s property is currently being allowed to flow south for the benefit of South Australia.
Mr Campbell’s neighbour, Andy Lostroh, sold his entire herd of 260 prized milking cows six weeks ago. The Lostroh family had been milking cows for 110 years.
“Selling up has been the hardest thing I’ve ever done in my life,” Mr Lostroh said.
“But when you’re making big losses, year after year, you have to bite the bullet.
“I don’t have plans for the farm but doing nothing is better than milking cows, because we’re not losing money every day.”
After a lifetime as a dairy farmer, the 54-year-old has landed a job as a teacher’s aide next term.
NSW Farmers lobbyists expect milk will be trucked in from Victoria, which is a larger milk-producing state where many areas have had good rain, to make up the shortfall from local farmers exiting the industry. Supermarkets will increase the price of milk but it won’t be enough to account for the huge hike in costs crippling farmers, according to Dairy Australia senior analyst John Droppert.
“It’s hard to overstate the impact of the drought,” he said. “Farmers are exiting the industry, processors and supermarkets will take a hit, but eventually we’ll see a price increase.
“Water, hay and grain prices have doubled but milk prices won’t double, so everyone’s going to
take a haircut.”
Farmer Andy Lostroh, with daughter Jemma, wife Cathy and daughter Sophie, has been forced to sell his prized herd of milking cows.