Water cost drains dairy farms

January 17, 2018

Bucking the trend: Dairy farmer Graeme Spunner, who is sticking to his besieged industry, says farmers have to adapt and use less water than before.

Berrigan dairy farmer Graeme Spunner is a rare survivor of a rapid change sweeping the industry in the irrigation districts of the Goulburn Valley, northern Victoria and NSW’s Riverina.

With the purchase price of permanent irrigation water entitlement rising to between $3000 and $3700 a megalitre along the Murray River — and temporary one-off water costing between $100 and $150/Ml on the day — using water to grow grass for dairy cows to eat is fast becoming uneconomical for many milk producers.

Irrigated dairy farmers have been the biggest losers of the 10 to 20 per cent cuts to water licences across the southern basin under the $13billion Murray-Darling Basin Plan, making water scarcer, less reliable and more expensive to access.

Coinciding with a time of low milk prices, the end of the long millennial drought and the Murray Goulburn co-operative dairy crisis, many dairy farmers from Cobram and Nathalia through to Echuca and Rochester and across to Shepparton have sold their water rights in government buybacks — or to alternate agricultural users such as more profitable almond nut or fruit farmers — in a bid to try and pay down debts and ease bank pressure.

The Australian Dairy Industry Council has warned three of every four dairy farmers from northern Victoria and southern NSW, who produce 25 per cent of Australia’s milk, could walk off their farms by 2024 if the full basin plan with its total cuts of 3200Gl a year of irrigation water is completed.

Dairy Australia figures reveal the number of dairy farmers around Cobram, Nathalia and Rochester has plummeted 47 per cent from 2589 farms to just 1377 in the past decade.

The loss of 20 per cent, or 234Gl, of annual irrigation water — enough to fill half of Sydney Harbour — from the northern Victoria region has seen nearly 1000 jobs disappear and axed $200million from the value of annual milk production.

Mr Spunner, who has been on his farm since 1973 with his 445ha farm irrigated from the Murray, said he wasn’t going anywhere.

With two of his 280 milking cows among the top 20 milk producers in Australia — each producing more than 15000 litres of milk a year when the Australian average is 6500 litres a cow — Mr Spunner is proof dry northern Victorian and Riverina districts dependent on irrigation water can be ideal for dairying.

He will not follow many of his peers who have either left the ‘‘dust bowl desert’’ of the Goulburn Valley for greener pastures in Gippsland and Tasmania, or quit the dairy industry.

‘‘It’s really healthy country for cattle and the water is here, so it’s very productive too,’’ Mr Spunner said.

‘‘But you need permanent water rights (bought a long time ago) to make it all add up these days.

‘‘No-one can make a living buying water at more than $100/Ml on the spot market with the current farmgate milk price of 35¢ a litre.’’

From December to May, Mr Spunner’s milking herd is kept in a dry paddock and fed on mixed rations that include grain, silage and hay grown on his farm using the precious water.

‘‘We have had to adapt and use less water than before,’’ he said.

Courtesy The Australian

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