How much is a dairy farmer worth?


Owning and operating a dairy farm comes with special conditions: working all public holidays and weekends, starting at 5am and finishing at 6pm or so.

Your duties include animal husbandry, machinery and agronomy skills, coupled with the managerial responsibilities of a business that turns over about $800,000 annually.

But, erm, your pay? If you’re lucky, you get paid. As ABARES notes:

“Over the 10 years to 2015–16, the proportion of dairy farms recording negative farm business profits averaged 51 per cent a year.”
– ABARES, Farm Financial Performance

Since only half of us make a profit in any given year, many farmers simply do not pay ourselves for all the hours we work. Officially, though, we are due the grand sum of $28 per hour. This is the value of “imputed labour” – the work done by family members like Wayne and me that is unpaid.

As Dairy Australia explains in its DairyBase fact sheets:

“Imputed labour hours are valued at a standard rate per hour and reflect
what it would cost to replace those hours with paid labour.”
It’s about the same hourly rate promised to a fill-in nine-to-five handyman.


It’s rather a lot less than the median $34.60 an hour paid to Australian male full-time employees. And, strangely, I can’t see how I could replace Wayne or myself for $28 per hour if one of us fell seriously ill.

Assuming we could find someone who, “under the direction of the owner or manager uses their expertise and skills in order to supervise and maintain the operation of a dairy farm,” that would be a Farm and Livestock Hand, Level 8 (FLH8).

Under the Pastoral Award, the minimum rate is $22.80 per hour, with time-and-a-half for overtime and double time for Sunday milkings. Assuming Wayne and I were only working 50 hours per week (the official industry standard for one FTE), the numbers look like this using Dairy Australia’s calculator:


That’s dizzyingly close to $28, isn’t it? But it doesn’t include the 9.5 per cent superannuation guarantee payment. That brings the hourly cost up to $30.43, well over the imputed labour cost of $28.

But we’re still not finished. Full-time employees are also entitled to annual leave and sick leave. Unlike some businesses where things can be put on hold for the odd sick day or even week off, we’d have to hire a casual to fill their shoes. That tots up to 25 days.

Let’s assume that a person who can work unsupervised at FLH5-level (no management responsibilities) can cover those absences. If the fill-in person works the same hours as the employee on leave and is paid the minimum award rate with the 25 per cent loading for casual rates, it looks like this:


If the casual works the same 50 hours per week as the permanent for four weeks of annual leave and another week of sick or personal leave, the cost of those entitlements is $7620 per annum.

Amortised over the 2552 hours worked by the replacement for me or Wayne each year, that adds another $2.99 to the imputed labour cost.

The bottom line

So then, at the minimum rate, the replacement for Wayne costs $27.79 plus $2.64 superannuation plus $2.99 in “fill-in labour” to cover leave. That’s $33.42 all up, without worker’s compensation costs!

Of course, I have made a lot of assumptions here, including that:

  • the owner-operator only works a 50-hour week (in line with industry standards)
  • the owner-operator works weekends and public holidays
  • farm work, which does not involve feeding and watering cows (such as milking), takes six hours on Sundays
  • there’s not a good-sized gang of other staffers who can take up the slack while the main person is on leave
  • someone of skill level FLH8 is needed full-time
  • you can recruit and retain a skilled FLH8 who is happy to accept the minimum rate under the award
  • the owner is still able to guide the business

These assumptions are based on the likely scenario for an average-sized farm, which milks 261 cows. Because there is about one FTE for every 100 milkers, there are only two-and-a-half FTE equivalents on the average farm.

Staffing such a farm with a mix of FLH8 and FLH5 creates two permanent full-time roles and other part-time family labour or maybe a relief milker. In the real world, you can’t divvy up that FLH8 role into several positions with lower pay scales.

The going rate

I asked CFM Dairy Recruitment‘s Fiona McIlveen for the going rate to replace myself or Wayne. Upwards of $80,000 per year, she said, which is the equivalent of about $31 per hour.

“For a smaller farm milking 180 to 250 cows, you’d be looking at a range of $80,000 to $90,000,” Fiona said.

“For more than 300 cows, it would be more like $80,000 to $120,000.”

Where does $28 come from?

Dairy Australia Workforce Development Program Manager Sally Roberts explained it this way:

“It is important that dairy farmers can make informed commercial decisions when entering into share farming or leasing agreements,” Ms Roberts said.

“Dairy Australia’s Fairness Affordability Calculator and the Leasing Property Calculator give farmers the tools and information they need to help safeguard the profitability of their business and manage some of the risks associated with such agreements.

“The imputed labour description used in both calculators provides an accurate market rate for the cost of labour on a commercial dairy farm.

“Dairy Australia recognises that farmers involved in the running of their businesses undertake the full range of activities within the dairy business. Some of their work is at CEO level, some is at production manager level and some at farm hand level.

“All of the work is vital to the effective operation of the farm business, but it all has a different value commercially.

“While both calculators were developed off a strong research base, they are intended only as a guide and, given the complexities involved in share and leasing agreements, there will be situations where other considerations come into play when calculating imputed labour costs.”


  • The value of $1.00/kg MS to $1.10/kg MS is based on an analysis of DFMP and private consultant data detailing labour costs for dairy operations that were entirely dependent on paid employees to carry out the work of the business.
  • It is important to note that the value comes from the total amount spent on labour, including but not limited to wages, bonuses, work care insurance and superannuation.
  • Publicly available data on this topic is available from the Dairy Farm Monitor Project.
  • The data indicates the total commercial labour cost for a farm fully dependent on paid employee labour ranged from $0.86/kg MS to $1.44/kg MS, with an average cost of $1.09/kg MS.
  • These calculations were based on data obtained from dairy farms in Tasmania and Victoria in 2013/14, which was when the Share Dairy Farming in Australia Model Code of Practice was released.
  • DFMP for the 2016/17 financial year shows dairy farm businesses relying entirely on commercial labour have paid between $1.03/kg MS and $1.23/kg MS, with an average of $1.13/kg MS
  • Dairy Australia is in the process up updating both the Fairness and Affordability Calculator and the Leasing Property Calculator to reflect the most up-to-date data.”

What does this mean?

Using Dairy Australia’s own calculators, it’s pretty clear that you could not legally replace me or Wayne for $28 per hour and Dairy Australia’s own process for arriving at the figure does not appear to take employment law into account.

Why it matters

Such a low figure for imputed labour distorts the view of profitability at the farm gate.

If we “pay ourselves” at this rate, we look more profitable than we really are, which means policy makers can continue to shake their heads as farmers demand a greater share of the pie.

More importantly, what message does this send to the next generation of farmers?

Twenty-eight dollars an hour would not be enough, even if we were to earn it in real life rather than on a spreadsheet.

Milk Choices: let’s explore this further


Milk Choices explores an open market for milk at the farm gate

A team of volunteers has just launched a novel idea: what if dairy farmers could sell our milk to more than one customer? It’s a radical concept in dairy circles but not for any other business.

The volunteers have called the concept “Milk Choices” and say the time is right for a fresh look at the way milk is traded at the farm gate. And why not?

When the Milk Choices group asked me to help explain the idea, I jumped at the chance. It’s always important to consider the alternatives and this one may well change things for the better.

Put simply, Milk Choices involves an open market for milk would help farmers and processors manage risk and increase their profitability.

It’s not a working model yet – just a concept – and the Milk Choices team wants all of us to have a say in how it develops.

I’d highly recommend learning more at the Milk Choices website and, if you can make it, hear Scott Briggs present the idea in person at the Australian Dairy Conference this week.

To get inspired, take a look at the quick little video below.



Milk price index prize goes to…

An email sent to dozens of processors by Australian Dairy Products Federation chief, Dr Peter Stahle, has revived discussion about just who will do the analysis for the Milk Price Index (MPI).

It’s the latest twist in what can only be described as a “peculiar” chain of events to dog the rollout of what was billed as a $2 million solution offering transparency in farm gate milk pricing.

In the email, Dr Stahle wrote:

“…the group agreed that the Department would work to deliver, before the end of the financial year, a two-part MPI along the lines of:”

“Part 1 – A commodity price index based on global data, which would additionally indicate near-term trends

“Part 2 – Specific regional supplements that would, with brief commentary, refer to how farm gate prices had been impacted by market conditions. This would include a median price paid for milk (with a range), developed through a survey of farmers in the respective regions.

– extract from ADPF email dated February 6, 2018

During a phone call, Dr Stahle told Milk Maid Marian that industry was yet to see the final proposal and that the details remain open to negotiation and refinement.

Dr Stahle said it was proposed that, through ABARES, the Department of Agriculture and Water Resources would conduct the background analysis and deliver the index.

Meanwhile, Dairy Australia’s Charles McElhone said the involvement of a private consultant had not been ruled out. Although DA has consistently said it will not deliver the MPI, Mr McElhone said the research body would assist whoever was responsible for the analysis.

To ensure participation and a sense of ownership by dairy farmers, Dr Stahle said it was hoped that state dairy farmer organisations or other farmer representative bodies will engage in the delivery of training on the use of the index.

Can do attitude: a dairy daughter’s tribute


Dad, Mum and my brother Andrew at Wilson’s Prom

It never occurred to me that there were any limits for women during my childhood. My strong, stoick mother had it all: an off-farm teaching career that was as much vocation as occupation; family; weekly squash competitions; a trumpet; horse riding; a massive garden encircling a newly-built home and the farm.

But I did confuse what it is to “have it all” with “do it all”.

It was Mum and we kids who raised the calves before and after school, Mum who built the calf shed out of hand-mixed concrete and recycled iron, Mum who managed the finances.

She was no matyr but she did work smart and very hard. Everything was organised to the nth degree and time was a precious commodity.

Now Mum lives on the other side of the state but something of her continues to live on here, too. While I had no doubt that women can do anything, even after a neighbour told me girls were only good for getting married, I suspect the thought has never even crossed my daughter’s mind.

Times are changing, yes, but my mother’s legacy will endure for generations.


Weird farm facts: what does a cow and a hair dryer have in common?


Yep, it’s a heatwave. Dairy cows hate heatwaves. How much? Take a look at some of these weird facts from Dairy Australia’s Cool Cows website:

  • Each of our dairy cows gives off body heat equivalent to a 1500-watt hair dryer on a hot day.
  • Cows eat 10-20% less when the air temperature is more than 26°C.
  • A cow making more milk is more easily heat stressed.
  • Each dairy cow can drink 200-250 litres per day in hot weather – double the normal intake.
  • A heat stressed cow makes less milk for one to two days afterwards. If she’s heat stressed for two days in a row, milk production can be affected for a fortnight.

Suffice to say, the weatherman has our attention. Farmer levies fund a Temperature Humidity Index (THI) forecast that gives us a heads-up on just how tough it could be on the cows.

A THI of over 68 has a measurable impact on milk production, not to mention our cows’ wellbeing. As you can see, the forecast has us reaching a THI of 83. Nasty.


THI Dairy Forecast

We’re onto it. To help keep the cows cool, we milk earlier in the morning and later in the afternoon when the sun is low.

The cows have a paddock with enough shade and water for everyone that’s close to the dairy. We serve up a light meal of silage just beyond the trees, so they can sneak out from the shade, have a nibble and go back where it’s cool for a nap.

The dairy yard is sprinkled with water, giving the cows a welcome shower while they wait to be milked. Inside the dairy, ceiling fans whir above the cows for maximum comfort.

There are three water troughs on the way to the night paddock, which is a juicy crop of emerald-green millet. Better than being at the beach!



UPDATE: Milk Price Index definitely back on


SECOND UPDATE 23/01/18: Hours after the Department provided this update, the Minister’s office rang to clarify the CMPI’s status with this news:

“The Minister last week met with dairy farmers and senior dairy leaders who expressed support for the further development of the dairy price index.

“The Government is committed to working with industry to deliver the index to provide dairy farmers with extra information to help them plan and risk manage their businesses.

“The Minister is encouraged by the positive approach of dairy farmers to rebuild from recent challenges to create a stronger and more profitable future for the industry.”

It’s on again!

UPDATE 23/01/18: After the UDV president, Adam Jenkins, tweeted that the post below was incorrect, I asked the Department for further clarification. Here is the response:

  • “The contract in place to deliver the Commodity Milk Price Index was terminated by mutual agreement.”
  • “The department will put options to the Minister for Agriculture and Water Resources on the best way forward to deliver on the government’s commitment to achieve greater transparency and market signals in domestic and global milk prices, in accordance with the advice received from industry.
  • “This may still be via the CMPI.”

Meanwhile, Milk Maid Marian has been informed that the team which had won the contract to deliver the Commodity Milk Price Index has not been permitted to engage with stakeholders since late last year.

The Milk Price Index intended to offer farmers transparency around farmgate milk prices has been quietly scrapped.

It’s not yet clear where the $2 million set aside for the project will be reallocated.

In response to an email from Milk Maid Marian, a spokesperson for the Department of Agriculture and Water Resources said:

“The Department of Agriculture and Water Resources and Webber Quantitative Consulting have mutually agreed to terminate the contract to deliver the Commodity Milk Price Index.”
“The department will put options to the Minister for Agriculture and Water Resources on the best way forward to deliver on the government’s commitment to achieve greater transparency and market signals in domestic and global milk prices, in accordance with the advice received from industry.”
For Milk Maid Marian’s money, some really rigorous research into how the milk pricing system could be reshaped to address the issues identified by the ACCC would be very well spent indeed.


Of course our cows are sentient

Heifers and Zoe reach out

“You can trust me”

Any dairy farmer who does not know her cows are capable of feeling pain and suffering, or pleasure and comfort, should be stripped of her licence.

Yet this simple concept, called sentience, has created one hell of a ruckus after the Victorian government released its Animal Welfare Action Plan this month. All sorts of farm leaders have railed against the use of the term, calling it a “slippery slope” and claiming it could actually hurt animals.

“…the introduction of sentience will cause adverse welfare outcomes for animals as production systems are thrown into chaos. It will render some farm businesses unviable, causing job losses and untold economic damage to regional communities and cripple the supply chains that rely on these businesses.” – VFF media release, January 5, 2018

As a farmer who works with cows every day, I have no idea what’s prompted this outrage but I do know it’s got nothing to do with whether cows are sentient or not. Of course they are.

Farmers are animal practivists: we balance what’s best for the welfare of our cows all the time. How long do we keep treating that downer cow or should we euthanase now? And the big one: should we rear the calves with the herd or away from their mothers?

I get the feeling that our agripoliticians are on the offensive because they’re worried what the animal activists rather than practivists out there will do with the inclusion of sentience in welfare law.

The problem is that everybody knows cows are sentient. To deny it makes farmers look either cruel or willing to say anything at all to avoid being accountable. How we achieve the best outcomes is certainly very debateable but the need to consider cow comfort is not.

The importance of cow comfort is already well accepted in dairy circles. Cows and farmers do better when animal health and wellbeing is a priority. Goodness, it’s practically a science of its own! A quick Google reveals dozens of research papers on the subject.

The minister is being very courageous. It’s about time our leaders were, too.