Authors: Dr Will Chancellor and Dr Jared Greenville
ABARES Insights: The ‘multi-speed industry: Dairy productivity in the spotlight
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About this report
National dairy farm productivity has slowed considerably, and there has been a reduction in the number of dairy farms over the past three decades. Has the dairy industry fallen off the productivity treadmill or is there more to this story? Once farm data are aggregated into national level statistics the nuances can be easily lost. Untangling the statistics reveals that while productivity on some dairy farms is thriving, on others it appears to be lagging. This report unpacks the story of the multi-speed industry and explores the potential opportunities to unlock future growth.
Key findings
- National dairy productivity has stalled since 2010-11, achieving an average annual growth rate of (-0.04%) from 2010-11 to 2022-23. By contrast, national dairy productivity grew strongly from 1978-79 to 2009-10, at an annual rate of 1.90%.
- There appears to be significant differences in dairy farm productivity at the more detailed regional level, with some regions slowing while others accelerate.
- Incremental productivity gains are expected to stem from innovation, increased scale, and the exiting of lower productivity businesses. Efforts to increase productivity growth will be important in offsetting any further increases in input prices, and to buffer against any future fall in milk price.