Dairy set to churn out profits

THE state’s dairy farmers are the most buoyant in the nation about their income prospects in 2021/22, with 60 per cent expecting to generate a higher gross farm income, according to the latest rural confidence survey by agribusiness Rabobank.

The survey, released this week, reveals that for the second consecutive quarter, the state’s farmers expect the excellent business conditions currently being experienced to either continue or improve over the year ahead, with none reporting a pessimistic view.

Rabobank regional manager for Tasmania, Stuart Whatling, said seasonal and business conditions across the state were “very positive” and producer confidence was incredibly strong.

“Commodity prices are still outstanding, and farmers reaped bumper rewards from strong prices, which are forecast to continue,” he said.
“July was a wetter-than-average month, and some areas seem quite soggy, however winter rainfall overall has been average, allowing late winter planting of crops to get started. The conditions entering spring are generally excellent.”

The latest survey, completed last month, found 39 per cent of the state’s farmers are expecting business conditions to improve over the coming 12 months.

While this was down from 45 per cent with that view in the previous quarter, Mr Whatling said, the remaining 61 per cent of Tasmanian farmers expected a continuation of current conditions.

The state’s dairy farmers set a state record of 961 million litres for milk production for the year ending 30 June 2021, a 1.2 per cent increase on the previous year.

The latest figures available show that in FY20/21 there were 182,000 dairy cows and 391 dairy farms in Tasmania.

In his Tasmanian Country column Tasmanian Farmers and Graziers president Marcus McShane said the record milk production was an outstanding result, with the dairy farmers topping the nation in their confidence levels.

“The dairy industry within Tasmania is growing, it is resilient, it is innovative, and it is optimistic,” Mr McShane said.
“The ongoing confidence among the state’s farmers is feeding business investment plans, with Tasmanian farmers eager to invest in new equipment and infrastructure.”

“These really are unprecedented times for Tasmanian livestock producers, with a sustained period of really good seasonal conditions and great prices, and the forecast that those conditions will be with them for a while,” Mr Whatling said.
“The biggest concerns stemming from Covid-19 restrictions were being reported in the horticulture and aquaculture sectors, particularly labour availability for the horticulture sector and the cost of air freight to key markets in Asia.”
“Hopefully the new ‘Ag Visas’ recently announced by the Federal Government will help alleviate those labour shortages,” Mr Whatling said.
“There have also been some Covid impacts on agri-tourism businesses – these are a big industry in Tasmania which has been significantly affected by reduced visitor numbers, firstly through the lack of international tourism and more recently state lockdowns.”

Mr Whatling said the state’s farmers were now planning their business investments with confidence about the year ahead, with farm incomes also forecast to increase over the 2021/22 financial year.

Of those looking to increase investment, the vast majority is assigned for on-farm infrastructures such as fences, yards, silos (80 per cent, up from 44 per cent last survey).

Agricultural property prices continue to set new records across all districts, but supply was exceedingly limited.

The Rabobank Rural Confidence Survey is conducted by an independent research organisation.

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