Dairy's watershed year

Dec 07, 2018

It has been a big year for the dairy industry and ADF – sometimes difficult, but often rewarding. I want to reflect, in the final Dairy Insights for the year, on some of the significant moments from the past year.

The industry lost Murray Goulburn, which for nearly 70 years has been a bedrock of the Australian dairy industry – our biggest farmer co-op and our largest dairy processor.

The sale of Murray Goulburn to Canadian dairy company Saputo has no doubt changed the dairy landscape forever and the industry is still coming to terms with this event.

ADF led an industry discussion on the code of practice. Working under the auspices of the ADIC, we reviewed the voluntary code of practice and, through consultations with our state dairy farmer members, developed draft clauses to be incorporated into a new code of practice being implemented by the federal Government.

The Government is now using the ADIC work as a foundation to engage farmers in consultations around what they want in a mandatory code of practice.

We called for a change to the federal Government’s skilled worker visa system. We told the Government that the job of dairy farmer needs to be upgraded from an unskilled occupation to skilled. Not only that, but we argued that the visa systems should provide skilled workers with access to longer visa period and a pathway for permanent residency.

This is important because the industry is losing too much money – up to $364 million per year – due to labour shortages. The dairy industry employs more than 40,000, but we will continue to suffer if we can’t gain access to skilled labour.

This year we pushed for the Murray-Darling Basin Plan to include a socio-economic test that is fair for all farmers. Dairy communities cannot tolerate any further job losses or having to pay for increased temporary water costs due to less water being available. We advocated for a test that will deliver neutral or positive benefits for Basin communities.

We have also maintained an active policy focus on key areas such as animal welfare, trade and market access, biosecurity, and social licence.

But despite the achievements of this year, there is still much work to be done. This has been a watershed year for the dairy industry. I also want to highlight some of our priorities going forward.

Collaboration is vital between ADF, the state dairy farmer organisations, our industry services body Dairy Australia, and indeed across whole dairy value network.

With the departure of our major co-operative the role of industry leadership falls fairly and squarely with farmers through their representative and service bodies.

There is no institution to provide weight to the farmers voice. That will only come with farmers speaking as one.

We are not in competition with one another at the farmgate, and there can be no reason to depart from the original purpose of ADF “to promote the interests of the dairy farmers of the Commonwealth in all matters affecting them.”

To do this requires we engage in the painstaking work of building consensus. There will always be gaps and ambiguities, but is our greatest advantage in acting alone or together in the long-term interest of the industry?

We also need to seriously consider greater investment in leadership opportunities. We must have open and honest discussions about the future of dairy advocacy.

Farmers should have greater ownership over the achievements and opportunities in the industry, and we need to develop opportunities to engage the next generation and harness their passion for the dairy industry.

Looking ahead, it is important to keep in mind that while we are an industry that has been under intense pressure, we are also an industry that has the know-how and resilience to overcome adversity and thrive in the long term.

- Terry Richardson, ADF President

Drought policy priority

Nov 02, 2018

This season on my farm we are paying $470 a tonne for grain. Last year we paid around $280/t but that’s a sign of how tough things are, and how the current drought is affecting all farmers. Others I know are doing it tougher.

Prime Minister Scott Morrison has toured drought-affected regions and convened a summit to talk tactics on getting through the current drought and preparing for the future.

Any opportunity to make drought preparedness a government priority cannot be squandered. We urgently need an agreement between commonwealth and state governments to provide a national approach to drought preparation, response and recovery.

Unfortunately, there isn’t much chance of this drought lifting, despite recent rainfall acros some parts of the country. Australia just experienced the driest September on record and the Bureau of Meteorology is predicting a 70 per cent chance we will soon be hit with an El Nino event.

Fodder remains scarce and water prices have continued to surge. Farmers are now looking to secure new season hay for their livestock, which has pushed up demand. The result is near record price hikes.

Worryingly, prices will most likely rise further as demand for feed continues to come from across the country, outstripping supply. This means that securing long-term supplies of new season hay could be an issue.

Some farmers are resorting to alternative feeds such as sorghum stubble and cane tops. But with crops like canola being cut for hay and silage, farmers should be cautious and get feed tests.

Water prices are also a point of concern. Both northern Victoria and Murray water prices are at record highs. In northern Victoria, prices have skyrocketed by 202 per cent since last year despite less water being traded, down 53,770 megalitres (ML). The average price reached $321/ML in September, the highest since 2009. Demand continues to grow as tight supply is driving the price up.

The Murray irrigation area has a similar position – the average price recorded in September was $351/ML, up 179 per cent from the same time last year, despite the amount of water being traded decreasing by 22 per cent. The current price trend is being driven by lack of rain and reduced inflows. Our main concern is that if all weather forecasts prevail, there will be no respite from the high prices.

There has been little rainfall and drought conditions have only intensified. Unfortunately, this appears set to continue with the Bureau of Meteorology now indicating eastern Australia will likely remain dry.

Queensland, Tasmania, Victoria, eastern South Australia and southern New South Wales are all expected to have below average rainfall, while Western Australia has about an equal chance of exceeding the median rainfall. The above average temperatures are likely to remain to at least the end of 2018. These conditions will continue to pose challenges to producers currently affected by drought.

I would encourage farmers to use the different drought assistance packages being offered by state and federal governments. Information about all these initiatives is available on the relevant government websites.

Dairy Australia is also a valuable resource for information and advice on managing drought preparedness. The latest Situation and Outlook report is out this week and paints a more complete picture of seasonal conditions and critical factors for farm performance.

Many are calling this the worst drought in living memory. We’re all praying for rain, but with no end to the drought in sight, we must be realistic about our options and talk seriously about safeguarding against future droughts.

Dairy farmers aren’t just part of a broad industry; we are a community. Don’t be afraid to seek advice, talk with others and be aware of others who may need support.

- Terry Richardson, ADF President

Retailers must do the right thing by dairy farmers

Oct 08, 2018

For nearly a decade, dairy farmers have been wearing the pain caused by discounted products, whether it’s $1 per litre milk or cheap cheese.

I remember when the first $1 per litre products went on supermarket shelves on Australia Day, 2011 and the outrage caused by the resultant “milk wars”.

Prior to this marketing campaign, the last time milk was $1 per litre was around 1992. But in 2018, it’s impossible to live on a wage set at 1992 levels.

Now there is momentum to turn things around and give value back to the dairy supply chain.

Some supermarket chains have announced plans to help drought-affected dairy farmers.

Woolworths plans to introduce a special range of milk priced at $1.10 per litre in mid-October. Homebrand 2L and 3L milk products are currently on shelves for $1.10 per litre until the drought-relief milk product launches.

Coles is now selling its 3L Own Brand milk products for $3.30, with the money collected to be distributed back to farmers via a fund with an application process.

Both have been upfront about the fact that their initiatives are only short-term measures that aren’t intended to solve the problem of discounted dairy products.

As President of Australian Dairy Farmers, I represent farmers all across the country. Many are calling me asking how they are eligible to receive a fair price from either of these plans.

The problem with both plans is that many regions of Australia affected by drought with high production costs impacting thousands of dairy farmers, yet most of those farmers won’t be able to claim a benefit from either initiative.

Coles has encouraged any dairy farmers to apply for a grant through their fund, but those in drought-declared areas will be given priority, while

Woolworths intends to distribute the extra 10c from their drought-relief milk back to farmers via their processor.

While I support measures that see farmers paid a reasonable price for their hard work and dedication, I must ask, “Is this really the best we can do?”

Certainly ADF and our state dairy farmer organisations believe all dairy farmers must see a benefit from any increase in retail milk prices.

Farmers put tireless effort and resources into producing a quality product. And it leaves a deep and lasting impact to see your hard work sitting on a supermarket shelf for less than the price of water.

This pricing practice is not viable and we urgently need a shared solution to assist in building the long-term sustainability of Australian dairy farmers.

Ultimately, we must push for a permanent end to discounted dairy products, whether it’s $1 per litre milk or cheap cheese.

There is a groundswell of support for farmers hit hard by the drought and supermarkets have the best opportunity to scrap their discounted dairy products right across the breadth and depth of the dairy cabinet.

The supermarkets know what farmers want. They know what they deserve. It’s now time for them to take a big step forward and do the right thing by ending this pricing practice.

But until that time comes, I encourage the public to help dairy farmers by continuing to buy branded dairy products.

- Terry Richardson, ADF President

Time for young dairy representatives to step forward

Sep 13, 2018

I was in Canberra last month and witnessed first-hand the political turmoil that rocked the federal Government and which ultimately led to a change of Prime Minister.

Ironically, I was accompanying a group of young dairy industry professionals as part of the Developing Dairy Leaders Program, run by Marcus Oldham College with support from Australian Dairy Farmers and Dairy Australia.

The aim of the program is to expose the next generation of dairy representatives to industry advocacy and the Australian political process.

What they received was a valuable bonus lesson: leadership is everything.

Many of these young farmers had never visited the “bush capital” and had little understanding of how Canberra operates. For them, it was eye-opening to be caught up in the feverish atmosphere that engulfed the city during those four days.

But the leadership lesson is transferrable to the dairy industry, which we all know has struggled with its own leadership issues in recent years.

We talk a lot about unity. We talk about creating the mindset of one team, one dream. But at some point, these words lose their value if we fail to act.

The young dairy professionals I accompanied last week were in fierce agreement that unity is the vital element to ensuring a successful dairy industry.

This sentiment was reinforced by Agriculture Minister David Littleproud, who told the group that if they want to be taken seriously and influence federal politicians to achieve real outcomes for the dairy industry, the sector first needs to show leadership.

I have written before about the fractured state of the dairy industry. Our differences have become pronounced. Too often, we think only about the interests of our individual regions, instead of common ground that could provide a national, tangible benefit for dairy farmers.

This makes it difficult for political decision-makers in Canberra to understand which policies are likely to have the greatest benefit for farmers. Politicians love an industry that brings to them solutions instead of problems. But instead we have an industry too concerned with its internal issues to agree on solutions to the many problems we face.

As we saw in Canberra, this situation can have many consequences but won’t lead to outcomes.

The question is usually posed on social media: why can't dairy advocacy groups work together on behalf of farmers? The simple answer is there's no reason why we can't.

ADF, as the national peak organisation for dairy farmers, is the group responsible for taking solutions to Canberra and asking the federal government for its support in enacting these measures. To be effective, we need constructive input from farmers across the country who want to ensure a secure and prosperous future for the dairy industry.

Hopefully, this means you. We need you to join your state dairy farmer organisation and join the cause. Contribute your ideas and help us maintain a sustainable dairy industry.

- Terry Richardson, ADF President

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