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3rd April 2024

Dairy's Crossroads: The Urgency of Transition and Supporting Farmers Through Change

Dairy farming in Australia is undoubtedly one of the toughest and most demanding professions. For these farmers, the day begins long before the sun rises and ends well after it sets. With minimal to no downtime, they toil tirelessly, 60 hours a week, 365 days a year, facing a myriad of challenges that test their resilience and perseverance.

From the complexities of managing intricate production systems to the unpredictable nature of weather patterns and the ever-increasing input costs, dairy farmers navigate a landscape fraught with obstacles. Droughts, floods, and the disruptive impacts of climate change further exacerbate the already daunting task of running a dairy operation.

Yet, it's not just the physical and on-farm demands that weigh heavily on dairy farmers. The instability of milk prices, policy changes, water security concerns, and other external factors add layers of uncertainty to an already precarious livelihood. Unlike their counterparts in many other dairy-producing countries, Australian dairy farmers operate without direct government assistance. They face heightened exposure to global dairy markets and the unpredictable nature of Australia's climate.

The Australian dairy industry is facing a wave of change that's reshaping its landscape. Back in 2000, deregulation shook things up, triggering a series of shifts that have left their mark on the industry. One of the most noticeable changes has been the steep decline in the number of dairy farms across the country. Since the 1980s, we've seen a significant drop, going from nearly 22,000 to just over 4,000 farms, along with a sharp decrease in the national milking herd, down from 1.8 million to 1.3 million cows.

These changes have had a ripple effect, particularly in milk production. Australia has been experiencing a steady decline in milk output since deregulation, making it increasingly tough for processors to get enough milk. With no more price protections in place, many farms have been forced to close shop, unable to weather the economic storm.

Amidst the backdrop of long-standing traditions, there is a noticeable shift towards openness to change within the dairy industry. This trend reflects an increasing number of farmers actively seeking avenues for financial stability, endeavouring to alleviate persistent stress, and contemplating potential career shifts, even if it means stepping away from the industry they deeply cherish.

Farm Transitions Australia (FTA) conducted a comprehensive national survey to gain deeper insights into farmers' perspectives and readiness to transition with and without government support. Utilising KG2, Australia's largest independent agriculture market research company, the survey involved 147 dairy farmers. The findings reflect the realities of farming in Australia; they highlighted and reaffirmed farmers' challenges, shedding light on the industry's inherent unsustainability.

A significant 37.4% of participants expressed scepticism or uncertainty about the future sustainability of the dairy industry. Additionally, more than half did not convey positive satisfaction levels with dairy farming, and 54% indicated openness to exploring alternatives. These survey findings underscore the growing awareness and receptivity among dairy farmers to consider other paths amidst the evolving challenges in the industry.

Notably, 36.1% of farmers expressed willingness to transition away from dairy farming. An additional 19% stated they were open to transitioning into horticultural or other business ventures if government support and assistance were provided. Mental health concerns were prevalent, with 68.7% acknowledging that the challenges negatively impacted their well-being and 51% identifying the impact of dairy farming as a primary challenge to their mental health. Dairy farming is inherently challenging, marked by the relentless pressures from escalating operational costs, a decline in profit margins, persistent staff shortages, and the burdensome weight of long working hours. The mental health struggles of farmers underscore the gravity of the situation, with The National Rural Health Alliance reporting that the average suicide rate of farmers is almost 60% higher than that of non-farmers (NRHA, 2021).

The impact of climate change is not a distant future concern but a pressing issue affecting profitability. By 2040, dairy farmers may witness a significant drop in operating profits ranging from 10 to 30% due to the adverse effects of climate change, according to Dairy Australia's 2016 report (Dairy Australia, 2016). The significant profit drop is not merely a statistic but a stark reality for those who depend on dairy farming for their livelihoods. It amplifies the urgent need for transformative measures to address the industry's dual challenges of climate change and financial insecurity.

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) has already cemented Dairy Australia's projections by indicating a 5% decline in profitability for the upcoming year, specifically the 2023-24 period (ABARES, 2023). This sobering projection is a tangible manifestation of the challenges dairy farmers face. The financial strain on farmers is not an isolated incident but a symptom of a more significant, systemic issue that requires immediate attention. It underscores the precarious nature of the current dairy industry model, emphasising the need for alternative approaches to ensure both environmental resilience and the economic well-being of those involved.

Despite the compelling findings, there is a need for immediate concern and action within the dairy farming community. The absence of urgency among dairy farmers can be attributed to many factors, including limited foresight, inadequate support, and a lack of access to clear-cut and credible information. Many farmers may need more comprehensive knowledge regarding the long-term consequences of their practices.

The recent Farm Transitions Australia (FTA) survey reinforces this narrative, revealing that only 15% of participants felt adequately equipped and expressed no need for additional resources to make informed decisions about their farms' future. This stark statistic indicates that 85% of participants acknowledged the need for support in navigating their farm's current and future situation.

Dairy farming in Australia takes a substantial toll on the environment, with notable impacts on water pollution, land use, greenhouse gas emissions, and water consumption.

The contamination of waterways by dairy farm effluent, encompassing liquid waste, sewage, nutrients, pesticides, fertilisers, and discarded milk, infiltrates water bodies through various channels, including pipes, drains, and runoff from poorly managed land. The resulting pollution endangers human health and jeopardises aquatic ecosystems and the diverse species reliant on these water sources, exacerbating ground and surface water pollution.

Further compounding these environmental ramifications is the extensive land usage by the dairy industry. Spanning nearly 4 million hectares of grazing land across Australia, dairy operations occupy an area approximately eight times larger than that used for cultivating fruits, vegetables, and nuts combined. However, this land allocation often entails clearing native vegetation, leading to habitat destruction, biodiversity loss, and heightened risks of species extinction.

The inefficiencies inherent in animal agriculture become glaringly apparent when considering global food production. Despite utilising a vast majority of farmland worldwide, the meat and dairy industries contribute a mere 18% of food calories, underscoring the disproportionate environmental impact relative to food output.

Furthermore, dairy farming significantly contributes to greenhouse gas emissions (GHG), mainly methane from cattle grazing and manure. The industry's GHG is notably high, with large dairy corporations emitting more than some of the world's major polluters. Despite concerted efforts to curtail emissions, the National Farmers' Federation acknowledges that achieving meaningful reductions remains a persistent challenge.

Water consumption is another pressing concern within the dairy industry. Dairy operations are among the largest consumers of irrigation water in Australia, utilising approximately 25% of the nation's surface irrigation water. Furthermore, Dairy Australia foresees that climate pressures will exacerbate, subjecting dairy farmers to increasingly severe water shortages in the future (Dairy Australia). This anticipation adds a layer of complexity to the existing challenges, intensifying the strain on water resources within the dairy industry.

In conclusion, the dairy industry in Australia faces urgent and pressing challenges that demand immediate attention and proactive solutions. The escalating operational costs, climate change impacts, diminishing profit margins, water scarcity, labour shortages, and the strenuous demands of dairy farming not only threaten the financial stability of farmers but also cast a dark shadow on mental health, animal welfare, and environmental sustainability.

As underscored by rigorous studies and enlightening surveys, there is an undeniable imperative for comprehensive support and transformative measures. In this era of transition, Farm Transitions Australia (FTA) provides free direct and indirect support services to dairy farmers who may be experiencing hardship or financial challenges and looking to transition. FTA provides crucial direct and indirect assistance, empowering farmers to explore and transition into more sustainable, future-focused business alternatives, new careers or horticulture.

The journey toward a sustainable future requires a paradigm shift involving acknowledging the challenges and actively seeking and championing alternatives. We must rally behind our farmers and provide them with the tools, resources, and support for a just and graceful exit from the dairy industry. However, meaningful change also necessitates government support and intervention. We must urge policymakers to recognise the plight of dairy farmers and implement policies that facilitate their transition to more sustainable livelihoods. Together, we can ensure a smoother and more equitable transition for our farmers, paving the way for a brighter and more sustainable future.

FTA - 2023 Dairy Farmer Survey Report 



Farm Transitions Australia - Australian Dairy Farmer Survey 2023

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Dairy Australia (2016). Dairy Businesses for Future Climates. Accessed 23 January 2024.

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