With grain prices rising and milk prices falling, Terara dairy farmer Tim Cochrane is feeling the effects of the drought.
A big drop in the Australian grain harvest last year and fears for this year's winter crop have fuelled the domestic grain price hike.
“The conserved feed on the coast here is quite low compared to what it normally is,” Mr Cochrane said.
“Last summer and the summer before were very dry and there was very little stored feed.
“We then had a really wet period last February, March and April so for a lot of people the corn didn’t really grow and [we] couldn’t harvest for a long time.”
Continued dry conditions have meant that even this summer’s corn crop was “fairly ordinary” and Mr Cochrane said the planting of rye grass was also behind.
Due to the poor crops, Mr Cochrane said South Coast dairy farmers were buying in more grain and hay than usual.
“A lot more people are buying a lot more hay because they didn’t get any silage last spring for this winter, or had poor crops so they have to buy more feed in,” he said.
Last week, Mr Cochrane received a message from his grain supplier regarding new prices, which have been steadily rising over the past few months.
“We are paying $100 a tonne more than what we were 12 to 18 months ago,” he said.
“The elevated feed prices are going be around minimum for the next 18 months if not longer, depending on what seasons going forward do.”
With feed prices continuing to bite and milk prices at stand still, Mr Cochrane said running a dairy farm could be “difficult.”
“We were paying under $300 a tonne for the grain this time last year and now its closer to $400 a tonne,” he said.
“Our price of milk has gone down the last few years, and the biggest volume of milk on the South Coast is fresh milk, which is locked in at $1 a litre which is just ridiculous.
“The milk prices don’t go up with inflation and that makes it difficult when the prices are going down but all your input prices are going up.”
However, according to Dairy Australia global market conditions are set to deliver better milk prices for dairy farmers on the South Coast, but rising costs mean significant challenges will remain.
While global market conditions and increased competition for domestic milk supply indicated better milk prices for NSW farmers over the coming season, dry conditions had driven up operating costs and was expected to erode margins in 2018/19.
The green pastures of the South Coast are misleading, with almost all of NSW now suffering from an extended dry period, which is expected to continue throughout the winter and potentially spring.
Mr Cochrane said some winter rain in August would improve conditions for South Coast dairy farmers.
“If we can get some good rain around August we will have some good soil moisture to keep us going into spring,” he said.
While the NSW Government recently announced more assistance for farmers, Mr Cochrane said the measures hadn’t been well received.
As part of the funding boost, the criteria of the Farm Innovation Fund was expanded to deliver $50,000 seven-year interest free loans to allow producers to bring in fodder and grain to sustain stock on hand, as well as install key water infrastructure.
“I’ve only spoken to one farmer who thought it was good, the rest of us are pretty disappointed with it,” he said.
“That $50,000 is only going to buy five or six loads of hay and that’s not really any help because if you can’t pay for it now, you’re going to have to find the money later.”
While times may be tough at the moment, Mr Cochrane has been a farmer for most of his life and has no plans of giving up.
“I’m not going to stop anytime soon,” he said.
“We don’t have to do this, we could go and do whatever we want but that doesn’t give my kids a future, which is what my dad gave me and his dad gave him- a future in the dairy industry.”