Benchmarking

Benchmarking figures for WA are available for a number of sources including:

International Farm Comparison Network  (www.ifcndairy.org)

Australian Bureau of Agriculture and Resource Economics (www.abareconomics.com)

Red Sky (www.redskyagri.com )

In the International Farm Comparison Network study covering around 120 farms from 40 countries a farm in Western Australia was ranked as one of the top low cost potential countries or farms with costs of $25 to $30 US or less/100 kg milk (ECM).

This was compared to:

New Zealand and most farms in Australia with cost structures of $25-30 US/100 kg

Farms in the USA with costs of $40-47 US/100 kg and

Larger farms in the UK with costs of $38-45 US/100 kg milk.

The competitiveness of the dairy industry on a broader scale was demonstrated in an analysis of 37 farms in Western Australia Final Report:Analysis of Business Performance on Western Australia Dairy Farm” 2007. Red Sky Agricultural P/L  ). In 2005/06, the WA dairy industry had similar costs of production ($3.36 kg/MS) to South West Victoria ($3.31/kgMS) and Gippsland (VIC, $3.20/kgMS) while being higher than Tasmania ($3.04) or New Zealand ($3.08/kgMS).

If WA farmers received the same milk price received as their Victorian counterparts, and if all other farming practices had been unchanged, return on assets for these farms would have been 5% – only marginally behind Victoria and Tasmania but more than twice that of New Zealand.

Given that WA has a flatter supply curve than Victoria, Tasmania or New Zealand it is reasonable to expect the some of this higher cost of production and lower return on assets would be associated with supply pattern.

The strengths of WA dairy farming identified in the Red Sky report  included farm size, production per cow, and concentrate and forage costs (see below). Its weaknesses, and hence opportunities, included: pasture harvest (5.7 t DM/ha average), stocking rate and milk production per hectare. 

A summary of the physical features of Western Australian dairy farms for 2005/06 is presented below.

www.redskyagri.com