A generational shift is required for Australia’s dairy industry to keep supplying a growing population, writes Kirsti Keightley.
Soaring post-Covid population growth is bringing huge opportunity and challenges to Australia’s dairy industry, as the potential for demand to eventually outstrip dairy supply in future becomes a real possibility.
While this seemed unthinkable just a few years ago, record immigration levels are set to drive significant growth in demand.
The industry is recovering from the supermarket dairy price wars, yet there needs to be considerable effort and support to keep the industry growing and providing for domestic consumers for the years to come.
There are some lingering structural challenges to address, including a generational imbalance across the industry.
There are strong opportunities in dairy farming, and we are seeing positive developments – for example, farmers investing in robotic dairies and rotary dairies, and taking up new dairy tech like cow collars. And will southwest Victorian dairy farms that were converted to beef come back to dairy, to match the growth in Tasmania?
But we need to attract younger dairy farmers into the industry, and to specifically reach young farmers without a dairy background, to see sustainable growth.
These young farmers need to come beyond the established dairy farming families, as inherited dairy farms will not drive the industry forward – there are not enough of them. There needs to be concerted effort to attract younger farmers who may not have dairy farming in the family.
The industry can benefit from looking at new ways to encourage innovation in sustainable farming practices, including water-efficient irrigation systems, renewable energy adoption, and waste management strategies. These are all important in attracting younger farmers to dairy.
Perhaps the mainland could take inspiration from Tasmania’s recent success in dairy, as easily the best state performer in terms of growth. This hasn’t happened by accident, and it’s not just about good soils, water and quality pasture. Government programs have helped young farmers transition into the dairy industry and other farming business, and we are seeing the results.
For example, the Tasmanian government’s commitment to irrigation programs, critical for attracting new investment in dairy.
There is no doubt that encouraging younger farmers in the industry could be a boon to dairy in other states.
But we need to consider some form of incentive and intervention to bring them along, whether it’s through policy, financial incentives, or education and training. With a concerted effort the industry can manage the generational shift required to thrive into the future.
The other big factor is continued support for a strong milk price.
It is encouraging to see the minimum milk price being supported above $9 per kilo of milk solids ahead of the upcoming dairy season. This $9 level is critical – a minimum $9 price and controlling the cost of production will also help to drive sustainable growth in the Australian dairy industry.
Kirsti Keightley is General Manager Dairy Investments at Prime Value Asset Management