As Australian dairy farmers struggle to get an improved and fairer farm gate milk price from the failing domestic milk market, we must endeavour to ensure markets work to keep input costs down also. While QDO battles to keep electricity, water and red tape costs down, we should not forget feed costs are usually the major dairy input.
In times of drought, when the first loads of grain come in from South Australia, the price of grain in Queensland skyrockets to meet a very high-landed price. In better times however, when fodder such as hay in the south is plentiful, landed prices can be cheaper than prices many pay locally. As the old saying goes, you have to ‘shop around’. While there is information and monthly reports available to help inform farmers of market levels, if they are not shopping around then this information is falling on deaf ears. The effect of high and low grain and fodder prices on dairy profit can be dramatic and sometimes hurts more than an actual lack of fodder due to drought.
But it is not only in drought when feed costs have an impact. When Lion Dairy and Drinks gave first priority to its milk suppliers in obtaining brewers’ grain and subsequent reduction in price (amounting to around $25 a tonne), it was a significant saving for suppliers who were within an hour or so of travelling distance from the brewery. Farmers in the area, who were able to change processors, shifted in order to take advantage of savings that were worth several cents per litre. Cows can be fussy eaters sometimes and farmers may tend to stick to a known commodity but they should remember to check the competition. Currently southern hay prices may be worth checking out, but whatever the season it’s always wise to shop around.