Dairy farmer faces $40,000 carbon tax

BOTTOM LINE: Carbon taxes will be hefty for the dairy industry.
BOTTOM LINE: Carbon taxes will be hefty for the dairy industry.

HUNTER dairy farmers are bracing themselves for the beginning of carbon pricing in July, with one of them predicting the scheme could cost each farm $40,000 a year.

That is about $10,000 more than the Australian minimum wage.

A new Australian Bureau of Agricultural and Resource Economics and Sciences report says the dairy industry will be more affected than any other sector, with farm production values dragged down by 4.3per cent, or more than $4000, in 2012-2013, and 4.7per cent, or $4500, in 2014-15.

Aberdeen dairy farmer and Dairy NSW board member Scott Wheatley said the report probably underestimated the impact because Hunter farm production value could be much higher than the report’s estimate of $97,000, and the region usually relied on irrigation, which meant big power bills.

‘‘I think it will hit us [Upper Hunter] a lot harder depending on the size of the dairy and because we have a high level of irrigation,’’ he said.

He said a larger dairy of more than 1000 head could incur costs of between $40,000 and $50,000.

Mr Wheatley said an operation of about 200 head spent about $45,000 a year on electricity – 5per cent and 7per cent of their operating costs.

The report expects power costs to rise by about 10per cent.

‘‘Coalmines and the steel industry got relief, [under the carbon scheme] so should the dairy industry,’’ Mr Wheatley said.

He said farmers were battling downward pressures on milk, such as the supermarket price war and the high Australian dollar.

‘‘We have cut ourselves to the bone with efficiencies, we are getting more litres of milk per kilo of feed and we are more water efficient,’’ he said. ‘‘There’s nowhere else we can go.’’