Growing Dairy Regions

On this page:

• SA’s high-growth zones
• Natural advantages 
• Feed supply  

 

SA’s high-growth zones

This investment prospectus focuses on the geographical regions of South Australian dairy production which are considered to have strong growth potential and which are attractive to dairy product manufacturers and processors.

There are three existing high growth production regions, where the dairy enterprises have demonstrated sustainability in large-scale milk production under a variety of production systems. 

The South East of the state is regarded as an integral part of the future growth of the “South-West” milk field, which can justify further investment in processing and manufacturing capacity in the region - most likely in the Millicent-Mt Gambier corridor.  The extension of that zone - to include the lower Murray River lakes and other parts of the lower Murraylands region -provides further adjacent milk supply that will assist underpin such investments in the Millicent-Mt Gambier precinct.

The South East is one of the fastest growing and most competitive milk production regions - not only in Australia, but in the world.  Competitiveness is benchmarked in this regard by a number of factors including:

• Available natural resources and climatic conditions
• Access to competitively priced feed inputs
• Future production growth potential
• Sustainability in terms of a triple bottom line

The region plays an important role in the future milk-sourcing strategies of a number of major dairy companies in Australia.

Natural advantages

Drought resilience

One of the key advantages of South Australian milk production regions are their resilience to drought, based on the high reliability of its rainfall; availability and low-cost of grain and fodder; and the quality and abundance of underground water resources.

In recent times, this has been demonstrated by the continuing production growth in the South East during the severe drought that affected the majority of milk production in the industry.  While production in all other regions fell, the South East showed increased milk output.

Climate

The average rainfall across SA’s growing dairy regions varies from around 600mm to 1000mm per annum, yet has highly reliable rainfall with more than 90% reliability of the region receiving more than 600mm of rain.  Rainfall is predominantly in winter and early spring.           

Average daily temperatures indicate a mild climate which is suited to milk production throughout the year.  The charts below depict average daily maximum temperatures in the South East and lower Murray lakes regions

Relative humidity is a key consideration in cow comfort, and ranges as follows:

	Relative humidity (at 3pm)
	Mt Gambier	Meningie
Summer (January)	45%	49%
Winter (June)	73%	71%

Soils

Soil types vary greatly across the region, yet there are abundant areas of land that contain soils suited to pasture-based milk production in the lower South East and in parts of the upper South East and lower Murraylands regions.

Water availability

The long-term rainfall records indicate the areas in the lower South East to be relatively reliable for high-rainfall.  Significant groundwater irrigation from underground aquifers is available to supplement natural rainfall.

Government policy is moving towards establishment of a fully commercial market in water access rights and usage consistent with national water industry management.  This will support existing industry initiatives towards efficient water use practices.  This will maximise the use, value and productivity from water across the South East region.

The potential expansion of dairy production in the South East region of the state will accordingly be a combination of dryland and irrigated production enterprises.

There are a number of high-value user industries in the South East region which compete for accessible water, alongside a number of large area-low value water users.  It is proposed over time to stimulate the movement of water rights to dairy and other high-intensive users through the imposition of metered water charges, and a market in tradable water rights. 

Land use and suitability

There is significant land suitable for conversion to dairy enterprises in selected areas in the South East and parts of the Murraylands of South Australia.  The existing land use is dominated by extensive livestock grazing industries, mostly beef and sheep.

The selection of suitable land for conversion to dairy production can be assisted at a local level through the use of land attribute maps, which are available at regional centres.  These maps provide an indication of suitable areas based on: 

• Soil type (acidity/alkalinity)
• Access to water
• Access to road and power infrastructure

 

Feed supply

The milk production growth regions in the South East and Murraylands are in close proximity to a substantial feed production base located to the north and east of the dairy production regions. 

The total cropping output of the South East (including the upper South East districts) and Murraylands regions offers dairy producers access to an abundant supply of a range of feed crops and grains for use in dairy feed rations, accessible at low transport costs.

 A significant portion of the annual barley crop is malting grade product which is used in brewing products.

Cropping as a feed source

This analysis does not include crops such as lucerne which may be used as a hay or as “green-chop” fodder in a dairy feed regime.  There is a strong lucerne production area in the upper South East region of the state, in the region between Naracoorte and Keith/Bordertown and west towards Kingston.  Production of crops from the region - as either feed crops or seed production - readily lends itself to expansion in support of increased demand from the dairy industry. 

Contract production arrangements are available from producers in the region, as contract fodder production is becoming more commonplace in the industry.

<previous      next>