Benchmarking

When benchmarked against other Australian states Tasmanian dairy farms often have higher average return on assets and lower average cost of production.

Farm Performance Indicators

Tasmanian dairy farms have a long history of benchmarking data available, analysing dairy farm physical and financial information. The Tasmanian Institute of Agriculture (TIA) have been involved in the running of the annual benchmarking program, and financial and physical performance analysis, for the past 30 years.

Farm returns for Tasmanian dairy businesses very between years due to changes in both milk price and seasonal conditions. The average performance indicators for the last two years for Tasmanian dairy farms involved in the benchmarking program are outlined below.

  Averages    
Top Farms 2013-14 2014-15 2015-16
Return on assets, % 9.9% 7.9% 16.7%
Herd size, cows 508 552 720
Milk price, $/kg milk solids $6.88 $6.19 $6.88
Milk solids, kg/ha 1,206 1,312 1,306
Milk solids, kg/cow 422 445 458
Pasture irrigated, % 43% 49% 0%
Pasture utilised, kg DM/ha 9,200 10,068 10,700
Nitrogen, kg N/ha 158 173 238
Financial Performance Indicator        
  2013-14 2014-15 RSE 2015-16
Total Cash Receipts ($) 1,115,710 1,162,600 (6) 1,086,000
Total cash costs ($) 877,580 940,800 (7) 963 000
Farm cash income ($) 238,130 221,800 (10) 123 000
Farms with negative farm cash income (%) 0.0 6.0 (83) 17
Farm business profit ($) 123,100 112,700 (24) -14,000
Profit at full equity ($) 258,530 256,900 (14) 137,000
Farm capital at 30 June ($) 5,684,980 6,403,300 (9) na
Farm debt at 30 June ($) 1,740,440 1,728,600 (14) 1,851,000
Equity ratio (ave per farm) (%) 69 73 (4) na
Rate of return (%) 4.7 4.1 (14) 2.0
Off-farm income c f ($) 6,730 35,700 (81) na

Source: ABARES Dairy Industry Survey Sept 2016
RSE: Standard error expressed as a percentage of the estimate provided


Real farm cash income

Tasmania consistency achieves a higher rate of return in dairy compared to the national industry rate. Refer to chart 'Farm Cash Income - Real farm cash income, dairy industry, 2001–02 to 2015–16, average per farm. Tasmania and Australia'.

Dairy Farm Cash Income

Source: ABARES dairy surveys


Tasmanian vs Australian Returns

The Australian Bureau of Agriculture and Resource Economics (ABARES) conducts annual surveys of dairy farm performance throughout Australia. Tasmania tends to out-perform Australia as a whole, in addition to the major dairying region of Victoria, in terms of return on assets (RoA%).

excluding capital appreciation

Source: ABARES dairy surveys


Capital appreciation is included

When capital appreciation is included in the return on assets, since 2000 Tasmanian farms have averaged a return on assets of 6.1%, compared to 5.0% for all Australian dairy farms. The return including capital appreciation for Tasmanian dairy farms is above that received not only for the rest of the Australian dairy farms on average, but is also higher than the returns of dairying in many other states on an individual basis.

including capital appreciation

Source: ABARES dairy surveys


Dairy Business of the Year

The TIA Dairy Centre, with the support of Dairy Australia and DairyTas, offers a free benchmarking service that provides information about the efficiency and performance indicators of dairy farming businesses. Each year Tasmanian dairy farmers are able to benchmark their business performance through the Dairy Business of the Year (DBOY) award. Farmers can monitor the ley performance indicators for their business such as return on assets %, equity %, pasture utilisation and production per hectare, compared to previous years in addition to other farms. The DBOY award offers prizes for the top whole farm and share farming businesses, or farmers have the option of benchmarking their business only as a tool to monitor progress.

A copy of the 2016 DBOY booklet can be found by following the link below: