Drought? The Aussies call it the dry spell between rain

G’day. Another week another state. We have been in Victoria for the past week, staying with our friends Frank and Barb Tyndall and of course the focus has been on dairy farming, but there has been time for outdoor activity and a bit of sight seeing as well. We’ve been canoeing and cycling in various places, looking at the wildlife, admiring the scenery, and enjoying the glorious summer weather which is a steady 26 to 28C every day.

Highlights whilst out and about were being too far up a creek in canoe in high tide, which was too narrow to turn the long two-man canoes around amongst the fallen trees and mangroves, costing us time, which meant we ran out of depth before getting back to the ocean, dragging the canoes for some distance through the sand long after the tide had gone out. Whilst cycling we saw a goshawk chasing a little bird, flashing past like a jet fighter, twisting as it went, following the little bird’s increasingly desperate moves. We also saw a black shouldered kite take a rat out of the undergrowth, and a huge number of kangaroos, dominated by a huge thumping male, who stood up to us as we approached looking all of two meters tall.

A visit to an open-cast coal mine is something I have always wanted to do here, and this time we did call in to see ‘Loy Yang’ the biggest and newest ‘open-cut’ mine as they call them here. I expected to see a mine of some size, but this is so big that it is not a hole in the ground, but some other world which stretches to the far distance. It will eventually cover 5000 acres, and is already cutting 60,000 tonnes a day of coal, projecting an annual yield of 30m tonnes a year. With strong binoculars I could see 5 dredgers, which I am told are 200 metres in length and equivalent to 12 storeys high, digging 8 metres a minute with their enormous bucket-wheels, tipping the coal on to the conveyer belt which takes it up to the nearby power station. This power station alone is equivalent to over 2000 of our bio-plant digester at Crouchlands, and is not the only one supplied by this mine. It puts ‘green energy’ and its costs in perspective, that’s for sure.

These mines are owned by foreign companies now, and with coal prices at record levels in recent times, there is quite an outcry over the fact that government has allowed them to pay very little in taxation. Add to that the environmental concerns, it is essential that Australia, which is so rich in mineral and natural resource, has something to show for their removal. I am told that there is enough coal here for 500 years, so this issue is not going away, but if ‘carbon capture’ can be made to work, the cleanliness of this operation would be improved greatly.

The dairy farming industry in Victoria is suffering similar pressures to Europe, very high input costs leaving slim margins indeed. In the dry country (no irrigation), the weather last winter was appallingly wet, which has added to the difficulties. The dry country is exactly that, now that it is hot summer weather, and anticipating the rain (which usually arrives around mid - March) is beginning to concentrate minds as the autumn calving season gets closer. Spring calving herds on irrigated farms are into mid lactation, with quite variable milk production depending on how much grain has been fed, how much grass has been grown and how well it has been utilised.

Quite a debate is taking place here between those who keep spending on grain and fertilizer (and in some instances purchasing extra water allocations too), arguing that there is still a margin to be had if the inputs are targeted carefully, and the management is of high standard. Others argue that when times are tough, costs need to be cut, feeding less grain and applying less fertilizer. An interesting aspect to this debate are the so called ‘fixed costs’, and I have been asking if these really are fixed costs, or are all costs in fact ‘variable’? Fixed costs in Victoria tend to be infrastructure, labour, machinery, electricity and water, and of course finance (interest, repayment and income tax).

That new pickup or tractor is a fixed cost, or is it? How many labour units does it take to run the farm? How much machinery, farm bikes and the like should one have around the place? This is where cost-cutting is most difficult, but what is the return on this investment? It may be perfectly valid, but one needs to be sure, especially before cutting back on feed and fertilizer, the easy option; certainly the knee-jerk reaction. Heated debates are to be had on these subjects, and you need to be brave or very foolish to start talking to Australian dairy farmers about ‘doing it tough’, when you are a feather-bedded European dairy farmer; especially a Pom! We talk about drought in the UK, but dry country farmers here would call it the dry spell between showers.

There is also a huge amount of discussion about milk prices, supermarket domination (the Coles and Woolworth duopoly), and of course the exchange rate which has a huge effect on milk prices given that 40% of Australian milk is exported on the world market. Retailers shadow the export price, and overall the price of milk in Australia has fallen at a time of high input prices. However, retail price of Australian milk at $1 per litre is higher than UK prices, and it is easy to see why it’s a hot topic, and government is bringing in legislation to curb retail abuse of suppliers. Other trends are similar to countries all over the Western world, fewer farmers, fewer cows, higher yields, bigger farms.

We went to see the devastation of the bush fires, the one we visited started at Aberfeldy and has now burnt over 100,000 acres. Black scorched earth as far as the eye can see; hill after hill, valley after valley covered in burnt match-like trees. A pair of chimneys where a house used to be, a corrugated roof twisted and rusty where a large barn once stood. Dead cattle on the side of the road with obvious burn marks, survived the fire, but too badly injured to heal. Birds of prey everywhere, picking up the dead mammals from the ashes which now cover the forest floor. Devastation on a scale unimaginable in the UK.