A survey of 427 farm employers across dairy, arable, and sheep and beef in early 2026 found a labour market that’s softened while remaining competitive for skilled and experienced workers.
Dairy has led the way with steady gains, with the average salary increasing 3% ($2,249) to $73,172 compared with 2024 levels. The average total package value – which includes salary plus the value of benefits like vehicle use, meat and firewood – has lifted 5% to $77,186 for dairy employees in the past two years.
Karl Dean, Federated Farmers dairy chair, says the results reflect a sector that’s moved on from the exceptional wage pressures of the immediate post-COVID years, with growth now tracking closer to broader economic conditions.
“What normally drives on-farm wage inflation is minimum wage increases and tight immigration settings,” Dean says. “As that’s reduced, the flow-on effects aren’t quite as great, but entry-level positions are still fetching higher wages due to demand.”
He says the strongest gains in dairy are continuing to show up in entry and mid-level roles, where demand for reliable staff remains high across dairy farms. At the same time, wage growth at the senior end of the sector has eased, with Dean pointing to a combination of softer margin conditions and increasing use of technology on-farm.
“There might be a bit of technology and tools assisting higher-level decision making – things like automated systems and AI-supported tools – so that seems to be limiting wage growth a little at the top end,” he says.
The report highlights a clear shift compared with the previous reporting period, when dairy wages rose sharply alongside broader labour shortages and inflationary pressure.
“In that period we really saw wages go up significantly, even when on-farm profitability wasn’t particularly strong,” Dean says. “We saw those big double-digit percentage jumps over a couple of surveys.”
Now, however, conditions are more subdued.
While milk prices remain relatively strong at around $9.20 to $9.80 per kilogram of milk solids, breakeven costs have risen to around $8.50/kgMS. That tightening has flowed through into more modest remuneration growth, with profit expectations across the sector weakening over the past year.
“These factors help explain why dairy farm pay increases have been more incremental compared with bigger lifts in previous years,” Dean says.
Immigration settings are expected to play a key role in shaping labour supply over the coming year, with a wave of Accredited Employer Work Visa holders nearing the end of their permitted stay.
