Ecklin is prime dairy country but a long-established dairy farm is being converted to beef by its new owners.
It is estimated up to 20 farms and out-paddocks in south-west Victoria have gone from dairy to beef in recent years.
While the industry’s troubles in dry, northern areas have been well documented, the shift from dairy is also happening in the good rainfall zones of southern Victoria.
The sale marks the end of 33 years of dairying for Mike and Dawn Waite and while Mr Waite says it’s disappointing, they had to take the best offer.
“We were trying to hold out for it to stay dairy but the offer came in and it was done in a day,” he said.
Mr Waite blamed a lack of confidence in the dairy industry on the Murray Goulburn and Fonterra clawback disasters.
“We originally tried selling the farm a few years ago and the auction was two days after the Murray Goulburn announcement,” he said. “That killed the market; before that farms were at a realistic price.
“It’s probably one of the best dairying areas around but two other farms sold way under market which lowered the price of the whole area.”
Selling agent David Falk of Falk Real Estate agreed, saying traditional dairy land with good rainfall should be fetching top dollar, and there was still good potential for dairy in the region.
The Waites bought the farm 15 years ago but it had been a dairy operation for decades before that.
Mr Waite, 55, worked off farm for the past six years, originally to raise extra cash to buy a neighbouring property.
An illness in the family stopped the expansion plans and Mr Waite decided to concentrate on his work as area manager for livestock improvement company LIC.
“Generally, the 45 to 55 age group should be the ones buying the neighbour and growing but most of them have an exit plan to get out of dairy, which is a shame,” he said.
“You should have enough equity at that stage to be able to grow.”
Mr Waite said the Ecklin region was still good for dairy.
“People don’t understand how much more grass we can grow.
“It’s probably the best time for a young couple to be buying into dairy with low interest rates and reasonably positive signs for the industry, but the confidence isn’t there.”
He said problems facing dairy included the loss of equity in farms and the ongoing need for infrastructure upgrades.
“Farms got up to highs of $7000 to $8000 an acre, now they’re down to $4000s and $5000s. It’s such a beautiful farm.
“We spent a lot subdividing and planting trees but because the equity has gone out of farms, it’s hard to justify doing capital improvements if your family isn’t going on and our kids weren’t interested.”
The Waites paid $4000 an acre 15 years ago and sold for $5100.
“You sell to what the market is but I reckon it should have been around $5500. We’d spent more than $500 000 on improvements,” Mr Waite said.
“When we bought, we were competing with trees; now because of the demise of dairy there’s no one out there chasing the land.”
Mr Falk said beef farmers see the area as exceptional value compared to their land north of the Princes Hwy.
“Not very far north of us they have to pay $4000 to $4500 an acre; therefore $4500 to $5000 in our rainfall represents fabulous buying.
“Beef, sheep and cropping have been going extremely well so they’re in a good position to buy,” he said.
However, Mr Falk said he was confident of a good future for dairy in south-west Victoria and that owners should seek a premium for their land.
“I believe we in the higher rainfall areas undervalue our land, and I think we have for a long time,” he said. “In general, owners in the area undervalue what they’ve got.”
Mr Falk said there had been several people interested in the Waite farm and it would have been ideal for out-paddocks.
“Some said it needed work but if they were looking at it for out-paddocks it didn’t need anything,” Mr Falk said.
“The farm is well fenced, it has a house, good sheds and a dairy that works. It was set up like a Taj Mahal for an out-paddock but they still wanted to talk it down.
“In reality, it was a bargain.”
Mr Falk said prospective buyers needed to think longer term.
“Absolutely dairy is still worth it in this area. I believe we need to go back to the old-fashioned way of sharefarmers. That’s how you get young people into the business.”
There have been other recent beef-to-dairy conversions at Scott’s Creek and Castle Carey.