KEY POINTS:
The impact of years of drought combined with Fonterra's unprecedented payout forecast for next season has made the task of luring Kiwi dairy farmers across the Ditch that much harder.
But that didn't stop Australia's rural bankers at this year's Fieldays at Mystery Creek near Hamilton doing their utmost to poach New Zealand's rural talent. The bankers are trying to to prop up a market where tinder-dry conditions have decimated milk production and forced many small farmers out of the industry.
New Zealand dairy farmers already figure prominently on the dairying landscape in southeastern Australia, where they own up to 20 per cent of dairy farms in parts of the region, which is responsible for providing 72 per cent of the nation's milk supply.
But relocation has become less attractive as Australia's worst recorded drought has slashed production by as much as 10 per cent.
However, Australian rural bankers said the return of significant rainfall in April and May promised an improved outlook for the sector, and said they had fielded a rising number of inquiries from New Zealand dairy farmers as a result.
Rabobank senior rural manager Bryan Hunt talked up the attraction of lower rural land prices, easier access to the industry and greater competition.
"The opportunities to get into the industry are easier," he said.
While acknowledging that climate posed a concern, ANZ's area manager for Northern Tasmanian agribusiness Chris Sparks said interest rates in Australia were lower and more attractive than in New Zealand and that dairy farms in Tasmania were around a third of the cost of farms in New Zealand.
"Debt levels are so high in New Zealand," he noted.
A Rabobank manager from Eastern Victoria said one of Australia's great advantages for dairy farming was that little upfront investment was needed to supply milk, and those that did exist were minimal.
More competition in the country's A$4 billion ($4.48 billion) domestic market also meant dairy farmers could look forward to a variety of extra payments.
Rabobank senior manager for Launceston Greg Bott said dairy farms in Tasmania managed to achieve returns of up to 16.5 per cent even before capital gains.
He said Kiwis owned 100 of the 500 dairy farms in the state, which he said resembled New Zealand's South Island geographically.
"For starters, it rains," he said.
Rabobank's Tony Anderson warned that prospective migrants should nevertheless "investigate heavily" the intricacies of access to irrigation, which varied significantly between farms and regions.
