Pay rates for dairy employees just the tip of the iceberg as labour shortage sees milk pool shrink

Marian Macdonald
By Marian Macdonald
Updated May 5 2022 - 5:05am, first published 5:00am
DAIRY JOBS DESPERATION: Attracting labour is now the number one challenge for the Australian dairy industry, leaders say.

Dairy farmers are so desperate to attract the right people to milk cows and manage farms, they're paying well above award rates and poaching employees from each other but labour is in such short supply, many are simply burning out.

Labour availability is among the top reasons why the milk pool continues to shrink, according to dairy industry leaders like NSW Farmers Dairy Committee president Colin Thompson.

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"Farms have closed down because they just cannot get staff to operate the dairy," he said.

United Dairyfarmers of Victoria president Paul Mumford said, "labour is the thing everyone talks about wherever I go," and vice president Mark Billing, who farms near Colac, said farmer confidence had dipped in the face of rising input costs and labour shortages.

"I think until the labour thing is fixed, and I'm not sure how long it's going to take and whether it ever will be, there's a lot of farmers out there as I said before that are pretty tired and don't want to milk more cows."

South-west Victorian farmer and Australian Dairy Farmers director Ben Bennett was even more direct.

"Dairy farmers can't get the labour they need to be able to have enough time off and it's taking a toll," Mr Bennett said.

"A lot of dairy farmers are breaking down physically and emotionally in their 50s - they're not making it to retirement because they just can't do it any more.

"We are naturally drawn towards intensifying the system to make it more productive when we need to simplify so it can be manageable."

While there's no national count of just how many roles need to be filled in the dairy industry, a survey by the Tasmanian Farmers and Graziers Association, DairyTAS and the Tasmanian Government about 12 months ago showed there were about 700 vacancies in that state alone.

Australian Dairy Farmers policy and strategy director Craig Hough pointed to the Dairy Australia Power of People of Dairy Survey, which was last published in 2020 before the pandemic.

It found:

  • 47 per cent of farmers had recruited staff in the previous 12 months
  • 70pc said it is difficult to recruit staff
  • 93pc are filling roles within three months
  • 47pc did not use labour agreements to fill roles

Competition for labour had since become fierce, both within the dairy industry and from other industries. Farmers with average-sized herds were paying relief milkers $250 to bring the cows in, milk, clean up and go home, Mr Billing said.

"There's a bit of poaching going on between businesses, it's become such a competitive market," he said.

"We're competing with the Australian Lamb Company and Bulla as far as staff goes, and the casual rates are getting up towards $40 an an hour and you can get $35 an hour just putting a stick into an ice cream."

The award rates are well publicised on Dairy Australia website, The People In Dairy, which shows even the lowest skilled casual farm hand must earn at least $25.41 an hour.

But advisors like Grow Dairy HR's Rachel Finch, Dairy Jobs' Anna Hazewinkel or GDM Agricultural Consulting's Gerard Murphy, all say most farmers are paying well above the minimum.

Mr Murphy, who consults in Gippsland, said all of his clients paid over the award rate.

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"I think it's too competitive out there to stick to the award," he said.

Just how much higher than the award, Mr Murphy said, depended on the worker's experience and how well the prospective employer knew them.

It was the same for Ms Hazewinkel, who said her clients routinely paid about 10 per cent above the award rate and sometimes more.

"For instance, I'm actually working with a dairy in Gippsland offering their dairy farm manager anywhere from $80,000 to $120,000, depending on skills and experience," she said.

Of course, it's not all about money, with the standard of staff amenities playing a big role in attracting employees.

"Accommodation is a big drawcard," Ms Finch said.

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"There's all sorts of different things farmers can help with, like transport."

One of them is on-farm accommodation.

"Accommodation is quite a big factor because sometimes farms are quite a way away from towns and people need to start early, like 3am, 4 or 5am starts," Ms Hazewinkel said.

But farmers were often hesitant to offer accommodation, Mr Murphy said, even if there was a spare house on the property.

"Supplying housing does make a difference but it's a dual-edged sword that can bring with it some other questions or anxieties," he said.

"Even before you employ someone, you're putting them into a house that you own and it takes a fair bit of trust to go there.

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"As we see with house prices in regional areas, even an old farmhouse these days is worth a fair bit of money."

Aside from the pay rates and side benefits like housing or transport, all three consultants said the intangibles like hours, training and the relationship between employee and employer was crucial.

"Even if you're paying above award, that doesn't mean that you can expect someone to work 60 or 70 hours for you," Ms Hazewinkel said.

She said it was important to have a conversation early about average hours and the maximum anyone could be expected to work during peak times like calving.

"Just because you're a dairy farm owner and you do 80 hours a week, you can't expect your employees to do that, too; it's not their farm," she said.

Taking their cue from corporate employers, Ms Hazewinkel said, some dairy farmers even offer employee assistance programs that allow 24/7 access to counselling.

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The best employers also had good people skills.

"I've had employees come back to me saying, 'There is no way I can work on a farm where I am sworn out or where the owner swears at other people on the farm," Ms Hazewinkel said.

Murray Dairy communication and engagement officer Melva Tyson said a local farmer who knew his neighbours were paying employees more was nonetheless renowned for retaining good staff.

"He was talking to me about just ensuring that you're dealing with the whole person and, when you're bringing staff on, induct them really well," Ms Tyson said.

"He set the standard very solidly at the very beginning and really ensures the staff feel valued all along, so he was just talking about even a simple 'thank you'.

"He talks highly of his staff and when problems occur, he's more likely to say, 'It's because of me', so perhaps training hasn't gone well, he doesn't send blame elsewhere."

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Award rates are:

  • dairy operator grade 1A (farm and livestock hand level 1 - FLH1) - $772.60 p/w
  • dairy operator grade 1B (farm and livestock hand level 3 - FLH3) - $806.30 p/w
  • dairy operator grade 2 (farm and livestock hand level 5 - FLH5) - $840.10 p/w
  • senior dairy operator grade 1 (farm and livestock hand level 7 - FLH7) - $899.50 p/w
  • senior dairy operator grade 2 (farm and livestock hand level 8 - FLH8) - $966.50 p/w
Marian Macdonald

Marian Macdonald

National rural property writer

Writing for farmers in the Stock & Land, The Land, Queensland Country Life, Stock Journal and FarmWeekly, farming in Gippsland.

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