Sustainable dairy farming systems for a deregulated market in Northern Australia

Abstract

The northern Australian milk market was fully deregulated in July 2000 resulting in a decline in milk prices received by farmers of c. 20%. It was anticipated that median farm production would need to at least double over the next 5 years for sub-tropical dairying enterprises to remain internationally competitive. At a farm level these changes were expected to have significant socio-economic and environmental impacts. A farming systems research project was established to address the impact of market deregulation on three main parameters; farm economics, the social well being of farming families and the farm’s natural resource base. Five production systems were identified, through desktop modelling and iterative review, as having the economic capacity to provide a way forward for faming families in the new deregulated environment. To further assess these systems, field investigations were conducted over a four year period using physical models (farmlets) linked with commercial farms.

Adverse climatic conditions were experienced during the period of field investigations, compounding the impact of reduced milk price on farm profitability and farmer confidence. Three of the five farming systems demonstrated the potential to achieve satisfactory economic goals under these environmental conditions. However all three required significant investment in dairy specific plant and equipment to achieve goals in a manner that was socially and environmentally acceptable. Sociological studies showed an unwillingness of farming families to make these investments during this period post deregulation due to uncertainty they would continue in the industry, and, that the value of these dairy specific investments would not be able to be realised if they withdrew. In conclusion, in intensifying farming operations, incremental changes are relatively easy to manage but large rapid changes, still necessary at particular junctures in the expansion process, carry inherent risk. Contributing significantly to this risk is the historically variable rainfall regime of northern Australia.