Rain and cash crucial to alleviate drought impacts

The dairy industry is proactive about providing courses in feed budgeting, pasture management and bookkeeping, among others, to support the upskilling of farmers.

But when primary producers are staring down the barrel of drought, they also need solutions that support their business’s needs and releases of cash to support their business.

Dairy farmers in Gippsland are calling for immediate and creative solutions, for themselves and other regions in drought, that will ensure cows keep being milked, that their businesses are viable in the medium and longer term, and butter and cheese are still on the table for Australia’s consumers.

Victorian dairy farms make up 60 per cent of the industry, and Gippsland is the largest producer of milk in Victoria.

The dairy industry is in crisis and the drought conditions across so much of the industry’s geographic regions will result in lower production this year, and successive years.

With no rain for months, and nothing on the horizon, water is required.

“Many farmers are out of stock water, and have to cart it,” Benjamin Vagg said, a dairy farmer at Leongatha South, and South Gippsland representative on Dairy Farmers Victoria’s Committee.

“Just under 20,000 litres costs about $500 at the standpipe, and that’s not sustainable,” Mick Hughes said, a dairy farmer at Inverloch and member of GippsDairy’s board of management.

“South Gippsland farmers have been conserving water supplies since spring 2024,” Sarah O’Brien said, a dairy farmer at Dennison and chair of the GippsDairy board.

The drought in the region includes West Gippsland.

“These are the worst drought conditions we’ve had,” Evan Campbell said, a sharefarmer at Yannathan and West Gippsland representative on Dairy Farmers Victoria’s Committee.

“We haven’t had any soaking or run-off rain. Climactically, we’re in a green drought, but there’s no guts in resown pasture.

“The only thing that can fix this is rain.”

Dairy farmers across the region are also pumping water from neighbours’ dams, and consolidating their own supply.

Lisa Broad at Wonthaggi pumped water from five dams into one, to reduce the surface water availability for evaporation.

“People are also hosing down their dairy yard less often, only a couple of times a week, rather than daily, to conserve water,” Evan Campbell said.

Neil Gannon, a farmer in the Macalister Irrigation District and representative on the United Dairyfarmers of Victoria Committee, suggested commissioning monitor bores for commercial use so farmers can buy stock and domestic water from water authorities.

This was done in the 2008 drought.

Neil also suggested water swaps between regional water authorities, another initiative that saved dairy businesses in past droughts.

Michelle and Michael Axford, near Leongatha, had a shovel-ready plan in place last summer with permits to dig a new bore, leading into this year.

Mick Hughes said groundwater inland was okay for stock use, but groundwater was saline under many of the dairy farms along the coast.

Evan said the inland groundwater was okay for stock use, but was a long way underground to access.

Farmers are sourcing feed from as many sources as possible, but against escalating cost.

Livestock agent Nicky Reeves said straw hay had increased in price by $100/roll overnight.

The lack of feed was affecting all dairy farmers, whether or not they were in drought.

Nicky is finding it difficult to source hay, silage and other feed options for her clients.

Farmers are being quoted lucerne hay at $680/tonne – then there’s the cost of transport.

Evan said $500/tonne vetch is effectively $700/tonne landed on the farm.

Fodder into Gippsland is coming from as far afield at northern NSW and other options are coming from overseas.

The drought is causing farmers to look beyond their normal options, and include lentil hay, almond hulls and palm kernels.

Mick Hughes has ordered imported almond hulls and is waiting for them to arrive in Australia, after two B-double loads of hay were sold out from under him.

“The price of fodder jumps every week,” he said.

“Last week it was $631/tonne delivered.”

Mick had good supplies of silage going into last summer. With rain effectively switching off in December, he has been feeding his milking herd for months.

Evan said there was a risk of traceability with some feed options.

“If you’re struggling to find feed and you find some and the supplier won’t provide traceability documents, beggars can’t be choosers,” he said.

Peter Young, a dairy farmer at Buffalo, said he was running very low on water and, like many, has dried the milking herd off early for spring calving.

He sold empty cows, in good condition, in the saleyards in mid-May, with the best-selling at $800 and those in lesser condition selling for $50 each.

At the Koonwarra cattle sale in mid-May, the price crashed.

Beef farmers were asked to send their cattle to Yea, to make room for 2000 extra dairy cattle.

“The top pens of Friesian cows in good condition sold at $2.22/kg. The week before, they would’ve sold at $2.80/kg,” livestock agent Roger Tweddle said.

“Then the price went down to $0.15/kg.

“Friesian steers, 350kg, sold at $1.50/kg.”

Peter said he was holding on to as many of his cattle as he could, because he felt there wouldn’t be any decent cattle around to restock.

He needs to retain 350 milkers in his herd to service his debt level.

Secondary to rain, what is needed is cash flow. One dairy farmer near Warragul said he is buying $7000 of fuel a month, for tractors, trucks and pumps.

“A cash rebate on the fuel excise tax would free up cash flow and go a long way to helping us in these conditions,” he said.