Mr. Sean Farrell:

The Senator asked about our experience of switchers from other enterprises into the dairy sector. The experience to date has been very good for a number of reasons. I do not have specific statistics but those who have switched, in particular those switching from sucklers to dairy, have had natural advantages that resulted in strong dairy businesses. In the first instance, typically they have brought significant equity from their existing stocks into their dairy businesses. They have also been early adapters. By their very nature, they have already been, in general, good stock people and good at grassland management, which are two of the key elements to be a successful dairy farmer. They have also had the natural advantage of an appropriate grazing block or other infrastructure. They have had to invest in the infrastructure and perhaps amend existing accommodation, for instance, to provide a milking parlour. In general, however, the level of investment is nothing akin to what it would be if it was a greenfield development. Our experience to date, albeit in a medium to high milk price environment, since they have entered, has been good. Grassland management is one of the areas they have had to address and they have done so very well. Given the relative profitability of one sector versus the other, there will be more switchers. Efficient expansion is recommended and it will obviously not be for everyone. To date, those who invested in dairy farming and the financial planning required to succeed have been successful.