More Australian dairy farmers are breeding heifers specifically for the export market as they chase a 13th-month milk cheque. However, the trade explosion may not necessarily be coming at the expense of the national milking herd, with many farmers aiming to breed more cows to meet both export and herd demands. Export numbers ballooned during the price downturn and continued to grow to record levels over the past year, despite better milk prices.

Industry sources say exports are here to stay and are now viewed by many farmers as a regular part of their income. The average $1,600-$1,650 (€1,060) prices being achieved might not continue with lower global commodity prices and domestic milk prices in China having a dampening effect, despite continuing strong demand from the marketplace. During 2013-14, record numbers of heifers were exported, with 92,629 leaving Australia’s shores for a total value of almost $200m (€130m). This followed an explosion in 2012-13, when numbers increased from 65,276 to 87,629 as farmers reduced stock to counteract the industry downturn.

China is by far the biggest market, buying 78,896 heifers at a total value of almost $170m in 2013-14. The next biggest market was Pakistan which purchased 6,425 heifers. At the same time, national herd numbers have stabilised at just below 1.7 million over the past three years.

Dairy News Australia analyst John Droppert said last year was a record for heifer exports, which was one of the factors holding back the national herd. “It is certainly a better picture for growth if they are segregating exports a bit more rather than cutting into replacements to help their cashflow,” he said. Mr Droppert said Dairy Australia was mindful of the potential impact of exports on herd growth but this was not something it could control. “That decision is obviously up to farmers,” he said.

Mr Droppert said there was some concern that Australia might be setting up competitors to its own dairy products, “but if we don’t take the opportunity, someone else will”.

Holstein Australia CEO Graeme Gillan described the heifer export income as “the 13th month milk cheque”. Australia exports more than 50,000 Holstein heifers each year. Mr Gillan said farmers were now planning to breed extra animals specifically for the export market, and not just for short-term cash returns.

Farmer focus: Tim Fleming

Boorcan dairy farmer Tim Fleming is enjoying dual benefits from entering the export heifer market.

Not only is the southwest Victorian farmer enjoying the additional income, he’s using the export option to fine-tune the quality of his herd without risking its quantity.

Mr Fleming has joined the growing number of farmers sending heifers to the export market, with about 40 leaving the farm this year.

“We’ve bred extra numbers for it because it’s a good opportunity to capitalise on the prices they’re paying and to fine-tune our herd a bit at the same time,” he said. The Flemings had reared 15 heifers specifically for export.

“We had extra numbers,” Fleming said. “We didn’t plan on selling so many to export but ended up getting rid of about 40 because of the prices.”

They achieved around $1,650 (€1,090) for 120kg calves and Mr Fleming is keen to continue exporting in the future, though not at the expense of his milking herd of 400. “What we don’t think will make it as good in the herd we’ll look at offering them to export,” he said.

Mr Fleming now sees exporting a portion of the heifers as an ongoing option.

“It’s been a good result for us,” he said.

Farmer focus: Mike and Kim Jamiesons

Timboon dairy farmers Mike and Kim Jamiesons’ success at breeding has had a welcome and unexpected bonus. This year for the first time they’ve had so many cows on the farm that they’ve needed to look at the export market and other options to reduce numbers. And with strong prices for exporting heifers to China they’ve been tempted to take the plunge.

“We have 320 to calve for next year which is far too many for the farm,” Mike Jamieson said. “We’d really like to stick to 280 and at this time of year down to about 260. That suits our farm a bit better.” At the end of November they sent 14 young stock to China for the first time.

“Normally I like to hold seed stock because they’re the latest genetics and should be the best. I don’t like to sell but we’ve got plenty and the money on them is good ($1,650),” he said.

“We’ll look at doing it again in the future if the circumstances suit.”

They may also export to Sri Lanka if a mooted deal becomes a reality.