Covering the Goulburn and Murray valleys

Dairy farmer has had enough

A dairy farmer decides it is time to exit the industry.

SOPHIE BRUNS February 26, 2013 4:02am

Phil McKenna from Nathalia,.

The decision to place their dairy farm on the market has been a reluctant one for Phil and Tania McKenna.

Phil is the fourth generation of his family to be involved in agriculture but tough times, low milk prices and eroding equity have quite simply become too much.

‘‘Everyone I know is hurting, the mental pressure is just enormous; we are just burnt out,’’ Mr McKenna said.

‘‘Every farm is different and everyone’s situation is different, but it all comes back to one thing and that’s milk price.

‘‘This industry is in dire straits — we keep getting told to get more efficient and produce more milk but maybe it is the factories’ turn to get more efficient.’’

Mr McKenna said this season had been the last straw. Low milk prices and skyrocketing costs have taken their toll.

‘‘We have come to the conclusion that the way things are going and the current prices mean we are just chewing into our equity.

‘‘We can get out now and keep our run-off block and have some money left over and the decision to leave is still ours — I don’t ever want to be in the position where it’s not.’’

Mr McKenna is well aware the dairy industry is cyclic and he expects highs and lows, but there comes a point where you can’t continue to produce a commodity that costs you money year in year out.

‘‘We have had terrible season after terrible season in northern Victoria and we have spent all our money on feed.

‘‘We got through the drought and the floods; we survived the milk price drop in 2008 but that cost us $170000 in lost milk income and we are still paying that off today.

‘‘Where are the good years that will allow us to catch up? I wonder where the processors draw the line at efficient and whether it is more like financial abuse.’’

Mr McKenna said when the Exceptional Circumstances payments stopped things really started to tighten.

‘‘The EC kept food on the table and the interest rate subsidy allowed you to catch up each year. That needs to be put back in place again.’’

As a dairy farmer he said he didn’t expect to make millions of dollars each year.

‘‘All we want to do is to be able to pay our bills and live a decent lifestyle. We work hard day-in day-out and nobody minds that — but doing it all for nothing year-in year-out is a different story.

‘‘Communities start to suffer. Our local school at Nathalia used to have up over 200 students, and now it would be lucky to have 120.

‘‘People just leave. Local businesses are doing it tough too, no-one is spending because there is no money to spend.’’

Mr McKenna said during the drought the government announced $25000 grants which enabled farmers to spend money on things to improve efficiencies.

‘‘Farmers could do things like lasering, money was spent in communities — we need something like that again too.’’

A third of Mr McKenna’s farm has been modernised and is now under pipe and riser.

The system works well but the process he went through to get to that point was far from smooth.

In the end that block was out of action for 18 months while he dealt with red tape and different departments. He has also had to wear that cost as well.

‘‘The rules, in particular around water, are continually changing and you don’t know where you are.

‘‘We have just had enough of it all. I can’t see a future for my two sons — Nathan, 12 and Jason, 9 — so maybe it is just time to do something else.’’

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