The impact of innovation on the dairy industry over the last 30 years

Nov 2011 report

TheCIE has conducted a major evaluation of on-farm dairy RD&E over the past 30 years. Key findings are:

  • Major increases in on-farm production are estimated to have increased Victorian dairy farm profitability by around $10 billion over the three decades from 1980 to 2010;
  • Nearly half of this appears to be attributable to farmers’ and industry’s own initiatives. The other half may be attributable to on-farm RD&E which is estimated to have increased farmers’ profitability by around $7.7 billion in net present value terms over the past 30 years;
  • This same RD&E is estimated to have cost an estimated $2.3 billion in net present value terms over the same 30 years;
  • This suggests an estimated $3.30 economic benefit for each dollar invested in R&D. However, for every dollar dairy farmers have invested, their return may be well over (at least double) $3.30 because more than half of the investment has been paid by external sources. Moreover, many of the benefits from RD&E will continue to flow for some time into the future, representing further returns to investment in RD&E;
  • Processors are likely to have also gained from the considerable increase in production RD&E has delivered;
  • The major changes driving the increased profitability have been increased pasture production and utilisation, increased supplementary feeding and more efficient cows. Increased farm scale, improved animal health and natural resource management have also been important contributors.

View report online [pdf, 759KB]