Milking confidence: the outlook for West Gippsland dairy
 Baw Baw Features   By // 15:23, Saturday 9 November 2013

gippsland dairy warragul citizen preview video feature ron paynterDairy farmers across Australia have been hit by poor weather and market conditions, sending confidence to its lowest level in years at the start of this year. The industry has since recovered but what is future for West Gippsland dairy?



Reporter: It’s milking time at Ron Paynter’s Ellinbank dairy farm. Gippsland is renowned for its milk production and the wet, green pastures of West Gippsland have traditionally helped dairy farmers, but for Mr Paynter pressures from falling milk prices and poor feed availability due to unusually wet and dry periods have forced him to cut stock and miss a good season.

Ron Paynter, dairy farmer: We elected to actually cut stock numbers int he herd. Now, you cant’ just turn extra cows on so even though milk prices are good now, this farm is not able to bounce the cattle numbers being milked up to before the poor seasonal conditions and the GFC.

Reporter: Those conditions have contributed to poor confidence in the Gippsland dairy sector. Statistics released by Dairy Australia show positivity among farmers about the industry continued a one-and-a-half year fall in February before rising again in the following six months. For their milk Gippsland dairy farmers are paid the lowest price per litre of the state, which adds to the difficult season.

Ron Paynter: Confidence in the industry’s not there. Farmers have not been willing to spend the money to put inputs, expensive inputs, into producing milk when they haven’t been getting the return for it.


Reporter: But the local industry is far from in decline for Longwarry farmer John Versteden, who identifies a lack of people, not a lack of cows, as a concern for growth.

John Versteden, dairy farmer: Yeah, oh look, it’s got the potential to grow, it’s probably more about getting enough people who have the desire to do it. People is probably one of our biggest issues at the the moment and we suffer from… we don’t often tell people how good dairying can be. People have a perception, particularly the urban population have a perception that it’s hard work and it’s in hard conditions and its’ a lousy job to have and I don’t think it’s like that at all. The domestic growth probably doesn’t have a lot of potential, its been reasonably flat for a long time. Certainly there’s still plenty of opportunity on export but there’s also a lot of competition out there as well. There’s other countries that are growing their national production at a much quicker rate than we are.

Reporter: One business seeking to buck the domestic slowdown while exporting to overseas markets is the Longwarry Food Park, and for owner Rakesh Aggarwal the future looks good after a poor season.

Rakesh Aggarwal, managing director Longwarry Food Park: Well last year was a very difficult year for framers and the factories. Commodity prices were low, the dollar was high and the season was bad. But this year all three have turned around: the dollar is at a much better level than last year, the commodity prices are close to double from last year and the season looks to be coming on okay. There’s certainly scope for milk to grow in this area. If we get good season, two or three in a row, I’m sure the industry will start growing again.

Reporter: And the company’s locally branded milk, Gippy Milk, has proven very successful.

Rakesh Aggarwal: Well Gippy Milk is very popular in the region. In fact, we sell Gippy Milk in South Australian and the Northern Territory, and it does very well for us.

Danielle Auldist, executive officer GippsDairy: Gippy Milk is a really good story. We’ve talked about the bulk of Victorian milk going to export, but there have been niches that groups like Longwarry Food Park have filled. So the Gippy Milk I would see as really successful because people want to buy drinking milk that was grown in their local region.

Reporter: GippsDairy executive officer Danielle Auldist says while there are issues to be faced by West Gippsland dairy farmers the future is good, even considering the expected long-term effects of climate change.


Danielle Auldist: The forecast changes with climate change mean that agriculture is secure in Gippsland, in other parts of Australia it will be receding much greater than in Gippsland. Gippsland supplies more than a fifth of Australia’s milk, and West Gippsland is a really important contributor of that, in fact it supplies a quarter of that amount.

Reporter: But Gippsland’s land is in high demand, and not just from the dairy industry.

Ron Paynter: The outward push of Melbourne land prices have actually pushed up in many parts of West Gippsland and parts of South Gippsland on the peri urban where dairying’s not really an economical proposition.

John Versteden: I think it’s probably pushing dairy further south and further east. Like, there’s no doubt that, particularly from Pakenham though to Warragul and Drouin, that area, and Trafalgar, all those major towns on the highway are having an urban boom.

Danielle Auldist: Yes, there are places where market prices mean that it will be attractive for the farmers to sell up from there. What we will see is what we’ve seen in California and other places where market forces meant that eventually some farms will sell and move out to other areas to develop up into dairying, and I expect we will probably see the same trend in parts of Gippsland.

Reporter: But only time will tell what the next generation of dairy farmers will face. Will Kulich for The Warragul Citizen.

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