Investor Presentaiton
12
The dairy industry in Tasmania
Land affordability
Tasmania has traditionally had lower land prices than
comparable dairy areas in Victoria and New Zealand.
The tables below summarise dairy farm sales over the period
2015 to 2016.
Dairy Tas has more detailed survey data available in addition
to Table 3 below.
There is a noticeable increase in size of farms sold and in the
per hectare values, particularly in Circular Head and north
west regions.
O
Dairy farm sales analysis: 2015-16
Table 3: Farm area and total value
837
A guide for investors
13
Stock prices
The cost of livestock represents a
significant proportion of the total
investment in dairying. Dairy stock
prices vary over time depending
on a range of factors, including:
>> milk prices
Region
Number
of farms
analysed
Farm area
Farm price
Dry land
Irrigated
Bush /
Total
Land Improvements'
Total
pasture
pasture
waste
(ha)
(ha)
(ha)
(ha)
($m)
($m)
($m)
Circular Head
12
130
67
18
214
2.74
0.98
3.72
North West
сл
66
40
31
136
1.46
0.62
2.08
North
4
81
44
16
141
1.54
0.60
2.14
North East
3
130
114
19
263
2.19
0.80
2.99
All dairy farms
24
109
63
20
192
2.20
0.82
3.02
>> breed
1. Includes irrigation equipment.
>> production history
Source: Opteon, June 2017
Per effective ha
Total farm³
> time of calving
>> seasonal conditions.
Cow prices can vary by as much as
40 per cent from one season to another.
The prices quoted in the table below are
a reflection of the 2016-17 situation.
Prices and demand for export dairy
stock vary depending on export orders.
Export stock must meet relevant
selection criteria. Dairy stock that do
not meet export selection criteria
are subject to local prices.
Table 4: Per hectare values
Region
Number
of farms
Value per ha
Dry land
Per total ha
Irrigated Improvements²
Total farm²
analysed
pasture
pasture'
($/ha)
($/ha)
($/ha)
($/ha)
($/ha)
Circular Head
12
12 729
16 150
4 572
18 052
18 983
North West
North
5
II 600
16 820
4 576
17 446
21 170
4
10 375
14 475
4212
15 787
17 260
North East
3
7 131
|| 852
3 030
|| 877
12 373
All dairy farms
24
11 402
14 908
4 264
16 776
18 325
Time of calving
1. Includes infrastructure and water.
2. Total value divided by total farm area - including bush/waste.
3. Total value divided by effective area (dryland plus irrigated pasture).
Source: Opteon, June 2017
Note: Figures shown in the tables above are based on averages of the farms sold over the period.
The per hectare values are calculated from the per farm average value and size and averaged
from the farms sold in the region.
With the vast majority of the herds in
the state calving in the spring, it is often
difficult for autumn-calving farms to
source cows. Traditional autumn-calving
farms favour straight-bred Friesian cows
and generally run closed herds.
Production history
Herds with production history, either
at the factory or on the basis of farm
herd recording, tend to achieve higher
prices. However, per cow production
level is more closely related to feeding
(including concentrates) than it is to
breeding. The size of heifers at first
calving is also important.
Breed
Friesian cows have traditionally been
more expensive than crossbred or
Jersey cows. In recent years, some
dairy farmers with Friesian herds have
been able to sell replacement heifers
at premium prices to China. At present
exporters are buying Friesian heifers
as calves and yearlings. Export markets
occasionally exist for Jersey and
crossbred heifers.
Table 5: Stock prices 2016-17
Type of stock
Also Friesian cull cows are worth more
than Jerseys. However, there appears
to be little economic justification for
the difference in cow prices between
Friesians and Jerseys. No relationship
has yet been determined between
breed and financial returns.
In recent years there has been a
significant shift to crossbred cows, in
an attempt to correct herd health and
fertility problems associated with large
high-producing pure-bred Friesians.
Production
Jersey Crossbred
Friesian
level
(kgMS/hd)
($/hd)
($/hd)
($/hd)
Dairy cows
Spring calving
>550 kgMS
| 700
>350 kgMS
| 300
| 400
| 500
<350 kgMS
1 000
| 100
1 200
Autumn calving
>550 kgMS
| 700
>350 kgMS
<350 kgMS
| 300
1 400
1 600
1000
| 100
1 250
Yearling heifers
Local market
Export market
Heifer calves
Local market
Export market
Bulls
600
750
900
1 000
| 200
350
500
650
900
1 700
| 300
Source: Macquarie Franklin, Stock Prices, 2016-17View entire presentation