International Dairy Industry Farm Performance Report: Australia vs New Zealand vs United States vs Argentina vs Uruguay vs South Africa vs Ireland vs United Kingdom
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Australian Dairy Industry Farm Performance Report: State-by-State and International Comparisons including with New Zealand, United States, Argentina, Uruguay, South Africa, Ireland and United Kingdom
By David Beca
To view and download the report titled 'International Dairy Industry Farm Performance Report: Australia vs New Zealand vs United States vs Argentina vs Uruguay vs South Africa vs Ireland vs United Kingdom' please click here.
Para ver y bajar el reporte 'Informe internacional de desempeño del sector lechero: Australia vs Nueva Zelanda vs Estados Unidos vs Argentina vs Uruguay vs Sudáfrica vs Irlanda vs Reino Unido' por favor hacer clik aquí.
To view and download the report titled 'Australian Dairy Industry Farm Performance Report: State-by-State and International Comparisons including with New Zealand, United States, Argentina, Uruguay, South Africa, Ireland and United Kingdom' please click here.
New to version 2: all graphs now include actual or estimated results for 2020/21, and forecast results for 2021/22. Also, all farm performance graphs include data for Ireland and United Kingdom. The Irish data is based on Teagasc National Farm Survey reports. The United Kingdom data is developed from limited benchmark data provided by AHDB and from converting data in refereed and non-refereed publications into a farm performance model to represent average benchmark data.
Introduction
Dairy farming industries in all countries, and farmers within these countries, need to continuously review their business performance and production systems to ensure they retain a sound level of profitability. This is important if these industries, and the farmers within these industries, are to maintain a comparative advantage to other farming enterprises within their region as well as to maintain international competitiveness with dairy industries in other countries.
Comparative dairy industry farm performance data can be an important source of information for identifying trends in countrywide and regional business performance. If the ratios utilised for these comparisons are relevant to changes in profitability, then these can be used to identify both positive and negative trends that improve or reduce a country or region's competitiveness.
There is a full suite of farm performance ratios for the eight countries included in the comparisons in this report. These countries include Australia, New Zealand, United States, Argentina, Uruguay, South Africa, Ireland, and United Kingdom. The intention is that further countries may be added to these datasets if robust sets of farm performance data can be accessed.
Where industry performance is assessed on its success in maintaining or increasing farm profitability over time, maintaining or limiting increases in cost of production, and delivering consistent growth in national milk production, then the dairy industry performance trends in this report suggest that New Zealand has the highest level of performance overall, and that Australia has the lowest level of performance. Ireland, United States and South Africa would appear to be the countries that along with New Zealand comprise the top 50 percentile of performance in this sample, with Argentina, Uruguay and United Kingdom along with Australia comprising the bottom 50 percentile. However, all countries except Australia have been growing national milk production in recent years, so it would only be Australia that could be assessed as being relatively unprofitable and likely to be in the bottom 50 percentile of countries if a wider group were to be included in the analysis.
There is also a full suite of farm performance ratios for all six States of Australia, including Victoria, Tasmania, New South Wales, Queensland, South Australia and Western Australia, as well as for the three major dairy regions in Victoria. Where state performance is assessed on the same basis as for the countries, then Tasmania has the highest level of performance, and by a wide margin, with New South Wales and Queensland having the lowest level of performance. The three other states of Victoria, South Australia and Western Australia comprise a group somewhere between the highest and lowest performing states.
All the data for the Australian states are included in the lengthier report titled 'Australian Dairy Industry Farm Performance Data: International and State-by-State Competitiveness'. A small selection of the state-wide comparison graphs has been retained in the report titled 'Australian Dairy Industry Farm Performance Report: Australia vs New Zealand vs United States vs Argentina vs Uruguay vs South Africa vs Ireland vs United Kingdom'.
Graphs and tables that outline changes in total milk production, total farm numbers, total cow numbers, and number of cows per farm, highlight where trends over the last two and four decades have been similar and where they have been different. These comparisons can help identify where longer-term trends are consistent across all countries and regions, as opposed to trends that are more specific to a country or region and so potentially worthy of even closer scrutiny.
Graphs that outline changes in milk price highlight how variations between countries, irrespective of their focus on domestic or export markets, has been narrowing over the last two decades. For those countries and Australian states that have been performing poorly, milk price does not appear to have been a factor in their comparatively poor performance.
Graphs that outline changes in profitability and cost of production confirm how all the countries, and the Australian states, have evolved over recent years. To identify what factors have been creating changes in performance, there is a full suite of ratios that outline how farm performance has changed in all areas of the business. This includes a range of financial ratios, with these split between supplement and feed costs, labour costs, cow costs and hectare costs, as well as a range of physical ratios. These physical ratios include milk production per cow and per hectare, stocking rate (cows per hectare), pasture harvest, pasture as a percent of the cows' diet (production system), and labour efficiency.
There are a number of graphs that help describe farm and business conditions. These graphs include milksolids (fat and protein) percentages, USD exchange rates, inflation rates, minimum hourly salary rates, total value of farm assets per cow, opportunity cost of capital, risk free interest rates and long-term land lease rates.
Most milk related ratios are calculated on Energy Corrected Milk (ECM) with milk corrected to 4.0% fat and 3.3% protein. This has been completed for most litre and milksolids ratios.
These reports have been produced so that the data, and the associated trends, might be used by any interested party to inform discussions and create debate on how dairy industries can develop and improve their level of performance and profitability. Please contact the author (details on page 1 of report) if there are queries or requests for further analysis.
To view and download the report titled 'International Dairy Industry Farm Performance Report: Australia vs New Zealand vs United States vs Argentina vs Uruguay vs South Africa vs Ireland vs United Kingdom' please click here.
Para ver y bajar el reporte 'Informe internacional de desempeño del sector lechero: Australia vs Nueva Zelanda vs Estados Unidos vs Argentina vs Uruguay vs Sudáfrica vs Irlanda vs Reino Unido' por favor hacer clik aquí.
To view and download the report titled 'Australian Dairy Industry Farm Performance Report: State-by-State and International Comparisons including with New Zealand, United States, Argentina, Uruguay, South Africa, Ireland and United Kingdom' please click here.